Tips for Selling Via an Auction

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RISMEDIA, Feb. 28, 2008-(MCT)-To get a home ready for an auction, there are several steps to make to ensure the process runs smoothly. First, you should prepare the property by removing clutter, making minor and cost-effective repairs and obtaining a housing inspection report.

As part of the process you will have to decide if the property will have a minimum price that you will accept (this is called a reserve or floor price) or if the property will be sold to the highest bidder (an absolute price) no matter what the price is at auction. This is an important consideration because if there is not much interest in the property, the money that you spend on marketing (2 to 4% of the sales price) will be wasted if the floor price is not met. If there is little interest in buying your property, the price may be far below your expectations in a situation where an absolute price is selected.

The commission for the auctioneer can be paid by either the seller or buyer. The auctioning of a property assures that the highest price will be obtained at the auction _ that’s all. As a result of declining property values you should be prepared for the fact that bidders will know the market and be looking for a bargain.

You should contact three auction houses in your area and obtain information on their procedures, contracts and costs. It may also be helpful to attend an auction. You must be able to evaluate an auctioneer’s experience, training, professionalism, fees, marketing plan, auction process, qualification of the buyer, use of inspection reports and property disclosures.

An auction is the most appropriate for distressed owners who must sell in a hurry. In this housing market buyers are looking for deep discounts. Sellers need to look at the long term and in many cases wait until housing markets stabilize before selling.

© 2008, McClatchy-Tribune Information Services.

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