Last month’s article touched on some of the motivations for having an auction vs listing with a Realtor. This month I’ll get started on the process involved with selling your property at auction.
The first step is going to be to find out which companies are active in your area (or the area where the property is located). Check the newspaper and search online to see who not only regularly conducts auctions but regularly handles the type of property you want to sell. Examine the way they market their auctions and how they present information about it. In addition to their company website, you should expect the company to advertise on other auction-related sites. Pretend you’re a prospective buyer and try to look at it from that perspective. If you have trouble navigating their website or obtaining information about upcoming auctions, then you can reasonably expect people to have the same issue when trying to find out about your auction.
Once you’ve identified the movers and shakers, one of the best ways to see how your auction would be handled is to attend one (or preferably more) of the company’s upcoming auctions. It’s not at all uncommon for us to have folks in attendance who say they aren’t interested in anything, they just wanted to see how an auction works; especially if they are from an area where auctions aren’t commonplace. Is the auction site well organized and is it easy to follow what’s going on? Was registration smooth and efficient? How is the overall atmosphere? Does the auction crew interact well with the crowd and each other? These are just a few of any number of observations you can make by spectating. If you’re more outgoing, you can chat with fellow auction attendees who may be willing to share some additional insights. You can usually spot who is a seasoned auction goer and they can give you some feedback about which auctions they prefer to attend and why.
When your prospects are narrowed down, it’s time to contact them directly. Usually, the first thing the Auctioneer will want to do is meet with you at the property (or arrange for access to the property if you aren’t able to be there). With PVA, county clerk, and other public record information in hand, the on-site visit gives the Auctioneer a look at what they’re going to be working with and what type of strategy is most appropriate for the property. It also allows you as the seller to interact one on one with the Auctioneer and get a feel for how cohesive you are. You’re trusting this person to sell one of (if not THE) biggest assets you have, so make sure you feel comfortable. There’s nothing wrong with taking a day or two after the meeting to make your decision or calling and asking additional questions that you may not have thought of at first. Trust your gut and don’t let yourself get pressured into anything you aren’t okay with.
Once you’ve decided what company you’re going to use, you’ll agree on a date for the auction and other terms that may need to be included. It would be hard to list every term, but some basics will be whether the property is offered absolute or with a reserve price, expenses you may be responsible for, how the Auctioneer is compensated, and how possession of the property will be handled. You’ll sign an auction listing agreement that puts all terms in writing. Don’t rely on verbal statements, make sure that any agreements are in writing and that you get a copy of everything you’ve signed.
Now that the contract is signed it is time for the Auctioneer to take over and get rolling. The next article will describe the groundwork that is laid in preparation for auction day.