Auction

The Truth About Real Estate Auctions

By April 20, 2020 No Comments
the truth about real estate auctions

If you are thinking about selling a home or property in a real estate auction, you should know: All auction houses are not created equal.

This article will seek to differentiate between some of the larger ballroom auction houses and the smaller firms which offer more individualized attention.

While people choose their realtors according to their specific property’s needs, we believe that one way is better than the other at achieving the best financial results for the seller, and the highest level of satisfaction for the buyer.

Why Sell at Auction?

Before we get into the specifics, let’s take a moment to think about why people choose to sell their homes at auction.

People choose auctions for a number of reasons.

  1. Auctions are generally quick. Most of the auctions conducted by Sudduth Realty have a turnaround time of only four weeks, a lightening fast pace in the real estate world.
  2. Houses sold at auction are generally sold as-is. Instead of the buyer being able to make demands (paint this, fix that) and build those demands into the price of the house, houses sold at auction are sold exactly as they are. This can save huge amounts of work, hassle, and headache for the seller.
  3. Housing auctions offer the least hassle when buying or selling a house. Forget about mountains of paperwork. About inspections and walk throughs and haggling. A housing auction strips away everything but the brass tacks.

It used to be that most of the buyers for housing auctions were investors, but that demographic seems to be changing. More and more traditional live-in buyers have discovered the advantages of buying homes at auction, and the paradigm appears to be shifting.

This is an interesting development in the housing auction world because it means that the more traditional ways a firm would use to market a live-in house are becoming relevant for auctions.

Many auction houses might lead you to believe that creative, saavy marketing is less important when selling a house at auction. At Sudduth Realty, we respectfully disagree.

We believe that connecting motivated buyers and sellers is just as important with an auction as it is with traditional real estate, and we’ll explain why below.

How are Most Auctions Conducted?

To understand the difference proper marketing can make, a seller must first understand the way real estate auctions are conducted.

Most big firms use a technique called a ‘ballroom auction.’ A ballroom auction is when a group of properties is assembled in a lot, which is then shown piece by piece to a room full of bidders. While this strategy has its advantages (it packs a room and it definitely moves real estate), prices can be driven down by the availability of so many properties in a row. A bidder can keep offers low if they know another property is five minutes away.

Ballroom auctions also tend to exclude live-in buyers. And while it can be great to have investors interested in your property, it is the live-in’s who are generally willing to pay top dollar. From what we can tell, they don’t seem to enjoy having properties lined up in front of them like branded cattle.

Individualized Auctions

As the market for real estate auctions widens, we believe they strategies for selling at auction need to be widened as well. That’s why Sudduth Realty exclusively offers individual auctions. We want to focus all the attention on a single property. This way, we can ensure that the bidders who show up are all extremely motivated to buy.

Conducting an auction that is focused on a single property calls for a more traditional approach to marketing. You need the property to appeal to live-ins as well as investors, and to do that you need to focus on the house’s individual qualities, since you’re not going to be focusing on quantity.

The way we solve this at Sudduth Realty is to offer individual attention and state of the art marketing on every single auction we serve. This allows us to play up the strongest aspects of the property and fetch our sellers the highest price.

99% of the auctions we’ve performed have met or exceeded the seller’s price goals. This, combined with the quick turnaround and low hassle, make selling your home at an individual auction with Sudduth Realty a fantastic choice for anyone looking to sell at auction.