Seling Your Home by Auction

It used to be that auctioning a home was the last resort just for a property that was in distress and needed to be sold, was a foreclosure, or was a bank repossession.

That isn't the case anymore in today's tough real estate market. Selling a home by auction is becoming a viable option for owner occupied homes. It's an option that when successfully done can get a home sold in as little as 30 days and in most cases in about 60 days from start of advertisement of the auction to closing date.

Tips for auctioning your home:

• Pick an auctioneer with real estate auction experience. Having an auctioneer, who is also a licensed real estate broker, is also recommended. As a broker they can then also take care of the title work, the closing, etc. for the property after the auction.
• Auctioneers are not required to have a license. The industry does, however, have the National Auctioneers Association (NAA), which is a governing body for the profession. You also want to pick an auctioneer who is registered with NAA, as well as with Michigan State Auctioneers Association.
• Know what expenses are involved. Most auctioneers charge in advance for advertisement of the auction. This range in price from $300-$900 for advertising only, to $1,500 and up for auctioneers that offer marketing plans (this usually includes advertising costs and other expenses associated with the auction). In addition to advertising costs, some auctioneers will charge a non-refundable service fee for properties that are auctioned with a reserve. Commissions taken by an auctioneer upon sale of the property can range from 4-10 percent.
• Consider the timing of the sale. Real estate auctions held during the week tend to draw more bidders than weekend auctions - where there may be other activities going on.
• Know the difference in the types of auctions conducted. "Absolute" means the highest offer must be accepted. "Minimum Bid" is a confidential pre-determined minimum price a seller is willing to take. The seller must take this price if it is offered and there are no other higher bids. "Reserve Auction" means that the seller has the right to refuse or accept all offers. At the end of the auction the seller will be presented the high bid in a contractual offer, which can then be accepted or rejected.
• Realize that a realistic auction price may be 15-20 percent less than the average listing price for a home/property.
• Ask for references from an auctioneer's previous clients.
• Make sure your auctioneer requires all bidders to register in advance of sale and that they bring escrow money, or non-refundable deposit. This can range from a standard $5,000 deposit to 10 percent of the final bid. It is best for bidders to bring a cashiers check to the auction.

For more information about selling your home by auction go to:

http://www.auctioneers.org/ Website for the National Auctioneers Association (NAA).

http://www.frontdoor.com/Sell/Selling-a-Home-at-Auction/2110 Offers a great article on selling your home by auction - including finding an auctioneers, types of auctions and bids, and how an auctioneer gets paid.

http://www.frontdoor.com/Buy/A-Day-at-a-Real-Estate-Auction/2176 This link offers a slide show "A Day At A Real Estate Auction", which follows the auction sale of a home in Adrian, MI.http://www.finweb.com/mortage-loan-eduction/selling-your-home-via-auction.html Offers an article on selling your home by auction