Selling Property Through Auction

Mike Jones, CAI, GPPA, BASPresident – United Country Auction Services

Why Consider an Auction?

• When bidders compete, sellers win

• Set time and place of sale

• Comprehensive targeted marketing

• Buyers arrive ready to buy

• No negotiations

• Competitive bidding

• Governmental and judicial requirements can be satisfied

• Works in good and bad economic times

Real Estate Auctions Today

What’s Hot and What’s Not

• Residential

• Commercial

• Land

• Condos

• Recreational

• Trophy

AC

The Blended Method

Auction Formats

Reserve Auction

• A reserve is the minimum value the Seller agrees to accept in the auction

agreement.

• The reserve is normally NOT disclosed, it is simply stated that the property is

being auctioned subject to a reserve

• Reserves should be set as low as possible. It should be the Seller’s BOTTOM LINE.

• If the highest bid is less than the reserve, the Auctioneer can suspend the bids,

pull the property or try to get the Seller to accept the highest bid.

• If no offer is accepted, the Broker can try to negotiate the deal with the highest

bidder after the event.

Absolute Auction

• An auction in which the property is sold to the highest bidder regardless of the

amount of the winning bid.

Is my Listing a Good Auction Candidate?

Step 1 : Determine Seller’s Fit

Step 2 : Assess Seller’s Motivation

• Reason for wanting to have an auction

• Timing Requirements (when they NEED to sell)

• General Conversation (really listen to their answers)

Step 3 : Understand Property Sales & Marketing History

Step 4 : Establish Seller Expectations

• Marketing Expectations

• Obligations (debt, litigation, liabilities, etc)

• Pricing Expectations

Step 5 : Confirm Property Information

Is my Listing a Good Auction Candidate?

General Disqualifying Factors :

• Unrealistic pricing expectations

• Property is pending litigation

• Long listing period without price reductions

• Seller overbearing/hard to work with/difficult

• Seller has hired multiple qualified auctioneers & has been

dissatisfied with all of them

• Unwillingness to give control to the Auctioneer

• Multiple past failed auction attempts

• Seller prediction of failure

• Unwillingness to provide upfront marketing funds

• Unwillingness to fix bad condition issues

• Determining seller has not disclosed significant property

information

Broker/agent auction program

• Broker / agent commission stays in place per agreement

• Broker / agent can represent a buyer at the auction

• Broker / agent assists in representing the property

• Broker / agent has access to all inquiries and prospects

generated from auction process

• Broker / agent has access to additional sellers who want to

discuss selling their property

Broker * Agent Compensation

DOWN THE AUCTION PATH

Typical Auction Timeline

30 Days

Prior to Auction

45 Days

Prior to Auctio

n

75 Days Prior to Auction

90 Days

Prior to Auction

30-60 Days Post

Auction

3 Days Post

Auction

Auction Day

14 Days Prior to Auction

Client Consultation• Identify the seller’s goals, motivation, timing and pain points

• Situational analysis

– Ability to fund marketing campaign

– Format: Absolute vs. reserve auction

– Driving factors of the auction

• Property and client qualification for the auction method of

marketing

Research

Market analysis

• Market acceptance of the auction method of marketing

• Buyer & capital availability

• Demand for product

• Timing - seasonality

Competitive analysis

• Are the properties commoditized (i.e.: flooding the market with

hundreds of single family lots in one sale)

• Similar offerings in the marketplace

• Past performance of similar auctions

Creative Brief

• Data collection tool that prompts strategy behind a marketing plan

Seller Funded Marketing Campaigns

• Seller fronts marketing expenses

• Prepares seller for auction and strengthens engagement in

the process (makes a better seller)

• Minimizes risk for broker/agent/auctioneer in event of no

sale

• Depending on property type and location, marketing plans

can range 1-3% of estimated value (or more)

Advertising Marketing Strategies

What Are Goals and Benefits of Auction Marketing?

• Convey an opportunistic (often urgent) message to buyers

• Channel buyer attention to a central source (your website or

phone)

• Drive buyers to your auction

• Convert bidders to buyers

• Sell the property

• Build your internal buyer database for remarketing purposes

• Increase United’s brand awareness

• Impressions in the market with United’s logo/name on them, many

times funded by the seller

• Strategic media planning

• Rate and placement

negotiation

• Proposal preparation and

submission

• Strategic analysis and

application

• Revisions to meet client

expectations and budgetary

constraints

Marketing Campaign Development

Campaign Execution• Timeline establishment and management

• Media buying

• Timeline establishment & management

• Vendor management

• Quality control

• Creative direction

• Coordination of design, interactive, PR and media team

• Posting to third party websites

• Development, scheduling and deployment of third-party e-mail blasts

• Copywriting and editing

• Submitting proofs to client and applying edits

Day of AuctionProfessionally branding your auction is one of the best opportunities to

create differentiated customer value through an integrated process

• Bid cards

• Signage

• PowerPoint (PC) or Keynote (Mac)

• Pens

• Folders

• Attire

• Corporate collateral

Leave a lasting impression

• Bidders may be interviewing you for a sale of their property without you

knowing

Post Analysis Reporting• Back end reporting outlining

ROMI regardless of auction

results

• Outlines responsible and

transparent process

• Remarketing opportunity to

your seller

• A professionally compiled post

analysis is a significant

differentiator

Auction Resources Available to United

• Experience, product knowledge and a range of service offerings are

everything when conducting a successful auction.

• By giving you access to a wealth of experience and knowledge that is

unmatched within the industry, United Country Auction Services is

uniquely qualified to meet your needs on a local, national, and

international level. Through our vast network and comprehensive

services, we’re able to offer you a clear and simple path to success.

• As part of the United Country Real Estate network, United Country

Auction Services provides you with unparalleled expertise throughout

the sales process.

• In-house marketing services firm – Enhanced Marketing Solutions

Auction Resources Available to United

• Strategic marketing-plan development and implementation

• Web site development and search engine optimization (SEO)

• Lead generation and management

• List of confidential buyer prospects

• Access to new media and technology, including simulcast of online

auctions and multi-parcel auction software

• Warranty insurance for residential sales

• Valuation services

Engaging with a professional auctioneer is simple

• Mike Jones, President of United Country Auction Services,

is at your disposal and will work with you to ensure you’re

getting professional and reliable advise

• Locate a seller willing to explore auction services

• Contact Mike Jones at mikejones@unitedcountry.com

• Set up meeting or conference call with seller, Mike and

yourself

• Process will move forward from there, if applicable

Next Steps

Selling Property Through Auction

Mike Jones, CAI, GPPA, BASPresident – United Country Auction Services