Top 10 Real Estate
Auction Myths, Debunked

Some are, and some aren't. There is a big difference between multi-property distressed auctions and a high-end, individual real estate auction.

With an individual auction, the focus is 100% on your property. A professional auction company launches an intense strategic marketing campaign that effectively targets hundreds of thousands of prospects. On auction day, ready, willing, and most importantly able buyers arrive with cash in hand, prepared to buy at fair market value.

Since informed bidders have done their due diligence prior to the sale date, they have a good idea of the market value of your home. But nothing makes a property more desirable than knowing that many other people want it and are prepared to act now.

In a competitive bidding situation with the excitement of a live auction, properties can sell for more than fair market value. Unlike a traditional listing where it is customary for buyers to negotiate for a lower price, an auction drives the price higher.

If this were true, why would art, antiques, collectibles, and real estate sell at record prices at auction? The reason is simple: auctions create competition. No other form of selling creates competition like an auction does.

The reason some people think of auction as the last resort is because some sellers list their property first at an unrealistic asking price, and it sits on the market. They then decide to auction, and it promptly sells for fair market value.

If a seller chooses the auction method first, they have a better chance of getting a great price, because the property has never been anchored to a stale asking price. The market determines the price.

Real estate auctioneers must be licensed brokers or agents in almost every jurisdiction, or must have someone on their team who holds a real estate license in that state. Prestige Real Estate Auction operates as a licensed real estate brokerage.

Sellers sometimes have questions about the marketing and advertising costs associated with auctions. These costs cover direct mail, signage, newspaper, magazine, online advertising, videos, press releases, and property information packages. Marketing can cost thousands of dollars, depending on the type of property being sold.

Consider this: Have you ever known anyone with a great product that the marketplace was not aware of? How much exposure are you really getting when you put a sign in front of a house, place a listing in the MLS, and then wait for a buyer to show up? How many businesses go broke each year because they invest no money in advertising?

In our fast-paced world, people must be informed before they are motivated to act. A properly executed auction marketing campaign produces stellar results.

The cost is comparable to a traditional sale. However, with the auction method, the seller actually saves money in the long run, especially if they auction first instead of listing, because they eliminate long-term carrying costs such as mortgage payments, maintenance, insurance, and taxes.

Let us discuss the time value of money on your specific property. It's often the deciding factor.

There are three basic types of real estate auctions: Absolute (the highest bid wins regardless of price), Minimum (a published price floor), and Reserve (the seller confirms the winning bid). We evaluate your situation and help you determine which type of auction is best suited for you.

With a properly executed marketing campaign, there will be multiple bidders competing for your property, driving the price up to what the market will bear.

Nothing could be further from the truth. In the extremely rare case that a property does not sell at auction, remember that the intense marketing method has already exposed the property to a huge pool of qualified buyers.

When contacted post-auction, buyers will often make offers on the property. In many cases, offers to buy the property prior to the auction date are made, and even accepted.

In more than two decades of auction experience, our closing ratio is 98%.

This is actually true, and it is why auctions attract so many buyers. Aren't all buyers looking for a good deal?

Serious qualified buyers do their due diligence prior to the auction, so they will have an idea of the value of the property. While everyone wants the best deal possible, competition from other bidders actually drives the price up to market value or above.

We at Prestige are broker advocates. We welcome other agents and pay them a cooperative commission for working with us toward the success of your auction.

The listing broker keeps the relationship with the seller. Prestige works underneath the broker as the auctioneer. Everyone wins when the property sells.