Real Estate Auctions

[bill not in oh]

Anyone have experience with selling a property at auction -vs- through a realtor? I know a lot of variables come into play with auctions that don't with a traditional RE listing - weather on auction day, attendance, but any info or experience you can share would be appreciated.

[Marilyn]

Not personally, but I have a good friend that is an auctioneer in OK. The last time that we talked about it, he said that there was a greater and greater percentage of real estate sales that went through auction.

My advice would be to go to a couple of different auctioneers' sales to see how they're run and then speak w/the auctioneer.

[Ramblin Wreck]

I have experience only on the buying end, and I would say the seller almost always comes out ahead. A couple of years ago, I went to an auction of some lake lots on an east Alabama Power project/dam. These lots had been offered for sale for years at $60-$65K. A local realtor thought they would go in the $30-$40K range. A lot of folks from the metro Atlanta area showed up and they were bidding $70-$100K each PLUS a 10% buyer's premium. Of the 3 or 4 such auctions I've attended, that's been the case. I'm sure there are situations where the sellers don't make out as well as they hoped/thought they would, but I think that is the minority result...at least in our area. It probably is going to be tied to demand for land in general in your area though. Best wishes, however you choose to proceed.

[bqz]

You'll get less at an auction,most people at auctions are looking for a deals, so you can except much less ,for instance a neighbors house was appraised at 45k and sold at auction for 40k so ruffly 10-15% less than value.
Keep in mind, on this house they had a big turn out ,otherwise could have gone for way less.
Bidding started at 30 something (don't recall exact amount).

This also my help, I know when they had the auction the house sold for 40 they added 10% for auctioneer ,another 4k.

Simply put :the auctioneer got 4k and estate got 40k.

Hope it's at least a little help to you.

[Alice In TX/MO]

Here in southern Missouri, the commission on land purchased at auction is HALF that of going through a realtor.

[NWMO]

I would say lots more property is being offered at auction than in the past. Listings with realtors in our area have been slow moving.

Auction prices I have seen are at market value based on what I have seen. Much depends on the quality of the property though.

Also, I have seen many auctions years ago have minimum bid information or statements indicating that the property may be retained by the estate/owner if the price does not reach an established minimum bid.

[auctioneer]

It's all in the marketing they say.

[grayrecliner]

Real estate auctions work best, from the seller's standpoint, on highly desireable property i.e. lake property, sometimes hunting land, etc. From a buyer's perspective, be aware of the often added 10% Buyers Premium. I know it has to be clearly stated, but psychologically I think buyers sometimes bid what they want to pay in the excitement of an auction setting and although they are aware of the premium, don't always consider it at the moment.

[Mike in Ohio]

Originally Posted by bill in oh

Anyone have experience with selling a property at auction -vs- through a realtor? I know a lot of variables come into play with auctions that don't with a traditional RE listing - weather on auction day, attendance, but any info or experience you can share would be appreciated.

Bill, I bought my first parcel (farm) at auction and have attended many as a potential buyer. By and large, the property will generally go for the approximate value (all things being equal). Sometimes it goes cheap and sometimes it goes dear.

I would suggest that you call Gene Kiko at Kiko Auction and ask him some questions. (www.kikoauction.com) Bill Newell is a straight shooter as well (http://www.newellrealtyandauction.com/).

It's marketing marketing marketing.

Mike

[bill not in oh]

Hey Mike - thought you got lost... Kiko auctions are the auctioneers I am thinking of - they apparently handle as many properties as all the other auctioneers in Ohio combined.... Most appear to sell at or above appraised value, but their presence in Medina County is fairly limited and my research is pretty much limited to fairly recent history, thus the reason for my query here...

Thanks to all for the input - keep it comin' if you've got more...

[Ohio dreamer]

As I buyer I don't like Kiko Auctions. Their prices often go higher then other auctions and occasionally we felt we were bidding against a "phantom" bidder...but can't be sure (we can't always see through the crowdes that well).

We have a house on the market in Stark Co that its getting no interested lookers (I know the economy is slow over there, so we aren't too worried about that)...but, I am beginning to wonder if an auction might be the best bet. If we do go that way I will most likely call Kiko as they have the marketing in place and their auctions are often well attended (at least the ones I've been to even in the rain). Not to mention the same reasons above about why we don't love their auctions we would want to uses them...for some reason the prices seem to go a bit higher with them.

[Mike in Ohio]

Bill,

You are correct that Kiko doesn't have as strong a presence in Medina County. I think the reason is that there simply haven't been as many house/property auctions up that way compared to more rural counties.

I'd recommend a talk with them anyways. You wouldn't have any obligation.

Ohio Dreamer - I think there are a few reasons that auctions run by Kiko tend to end up with higher prices. The first is that they market much more heavily than many other auction houses. Just take a look at Farm & Dairy or local papers.

The second reason is that they avoid conditional auctions. Folks like myself tend to avoid those auctions because enough of the time the buyer decides not to sell (even if the price appears to be a reasonable one). Why should I waste my time as a buyer if I have to overcome that additional hurdle? There are a few legitimate times where I can understand "approval". If it is a bankruptcy or probate then a judge may have to approve the sale. You'll tend to see less bidders at conditional sales compared to absolute but that doesn't mean (as a buyer) that the completed sales prices will turn out lower.

The other reason I like Kiko (and Newell) is that there isn't a buyers premium.

I've bid at Kiko (as well as other NE Ohio) auctions for years and I've never gotten the sense that there are phantom bidders. In fact, in the few cases I've seen Kiko employees bidding o something they have made it clear that they are bidding personally.

Mike

[pheasantplucker]

My wife and I went to a land auction about three years ago in eastern Ohio. There were probably 150-200 people there. they had about 168 acres all divided up into about 12 parcels. You have to register to be a bidder. They will record your driver's license number, etc. Also most places want 10% down If you're the winning bidder. If you can't arrange for your financing within 90 days, you eat your deposit...it's non-refundable. I bid on a fifteen acre parcel (very rugged), three streams, two waterfalls, road frontage, meadow in the back, huge rock outcroppings. Got it for about twelve thousand dollars. Then I bid and got an additional 3 acres for another five thousand. The thing is...most auction places have one round of bidding as separate parcels. Then they bundle up groups of parcels and rebid. If those parcels sell for a higher price than they did as individuals, they are sold that way. As it turned out, one guy with very deep pockets ended up buying every one of the 168 acres. He let us little peons bid and think we were getting the deal of the century, but he obviously knew what he was doing. He didn't bother getting into the bidding until it was with the other big boys. It was fun and it was definately an adrenaline rush...my wife couldn't hardly take it. A great learning experience. go just to have some fun and watch the goings on.

[notenoughtime]

I also have a house for sale a few lookers but none serious. Auctioneer could you address "it's all in the marketing"? Auction is an option but concerned it may not bring what it is worth. I just put several thousand into it to put it on the market and it is listed with realtor. I am really frustrated and tired of mowing.

[yellowsprings]

Bill in OH,

DH and I sold his parents house at an auction (Sheridan and Assoc. in SW Ohio). Unfortunately only one person showed up in time and put in a bid. Their offer was for the going rate in the area so we accepted. As soon as we did, a late straggler showed up wanting to bid (oh well).

It was quick, easy and painless. I would do it again if the chance ever arose.

[Windy in Kansas]

The term real estate covers a broad category.

Are you speaking of building lots, agricultural land, city home property, rural home property, or commercial properties?

In my opinion city homes bring less while agricultural land auctions brings the highest dollar possible.

As a first hand example: I had some land appraised by two certified appraisers to determine if I wanted to mortgage it or sell it. Both appraisals were similar and around $300 per acre. I chose to auction the property.

The opening bid was more than either appraisal with one quarter of land selling for $749 per acre. Sure glad I didn't let a real estate agent sell it for me as it wouldn't have brought but appraised value because of loan value.

I sold another quarter at auction and it did okay but nothing special as it was a pasture quarter that would need a half mile of fence and a water well. The buyer also bought a quarter from my brother so that fencing and well weren't needed after all.

With wheat prices so high with a good yield this year I am now thinking seriously that this may be the best time ever for me to sell another quarter of land. I will certainly also sell it by auction to get maximum return.

[Jim S.]

My experience is that you will get fair value or more by selling at auction. Like with a real estate agent, the sale is only as good as their ability to promote and advertise it. Choose the auctioneer carefully, and you will do very well. GET REFERENCES, ask around among folks who have sold this way for the best auctioneers. There are two types of auction: reserve and absolute. If you are concerned that you will not get your land's actual value, hold a reserve auction (advertised simply as "at auction"). Bids below your reserve do not buy your place. If you want to be sure you sell at the auction date, hold an auction advertised as "absolute auction." The high bidder gets it, regardless of price. Absolute sales are often used with estates, where the estate must be assured the property will sell on that date.

Make sure the property is surveyed, and make sure the title is clear. If you as seller have a survey and an attorney's title search clearance letter present in the documents bidders will inspect prior to auction, you will be ensuring yourself of higher bids because there is less risk for the buyer.

Good auctioneers know all this.

Lastly, I do not like auctions where there is a buyer's premium, and I definitely feel that limits your crowd and limits the bidding range. So whatever arrangements you make with the auction house, I'd advise that you make sure they are paid out of the proceeds and that the fees are not tacked on to the buyer afterward.

[quietstar]

I believe the professional service you need depends upon what type of property you have to sell. Decades of experience have confirmed that more than 90 % of buyers of residential property require mortgage financing. If you have an unusual auction co. that is prepared to invest 6 weeks processing and preparing all the details for closing the sale while looking after your interests, go for it and let us know who this rare outfit is. All states I know of would require they have a brokers licience anyway. I've bought land at cash sales for years and never bid beyond a "good deal price". In any event, I wish you good luck...Glen

[seedspreader]

Hey Bill, there was an auction over on Fenn Rd. at the beginning of august, (a farm/estate auction) and I believe it was Kiko. It was huge. Sheriff's Dept there was all day directing traffic.

[bill not in oh]

Thanks for all the replies. The folks from Kiko's are coming over on Monday to talk with me... I'm pretty certain at this point that it's the way I'll go. If so, I'll certainly keep y'all posted....