LAS VEGAS, November 13, 2007 – With an increased inventory of homes on the market in some parts of the country, many sellers and home builders are turning to auctions to create new opportunities for potential home buyers looking to find the home of their dreams. That’s what speakers at today’s auction forum told attendees at the 2007 REALTORS® Conference & Expo, here through November 16.
While real estate auctions in the past helped sell foreclosed homes and fixer-uppers, today a wide range of properties are being sold at auction. They are becoming a more popular option for luxury homes and other quality units, including new construction from home builders and condo developers, who turn to auctions to help reduce excess inventory.
“Realtors® add value to the real estate transaction and can help potential buyers successfully navigate the process of buying a home through auction,” said National Association of Realtors® President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “There are many great properties available for sale at auctions, and buyers can enjoy many great benefits, as long as they are well informed, have adequate time to view the property and understand the terms of the sale.”
According to the National Auctioneers Association, the fastest growing auction specialties are real estate-related. From 2003 to 2006, residential real estate sold at auction grew 39 percent, and commercial and industrial real estate auctions rose 27 percent.
“There are many benefits to buying a home at auction,” said Val Gehringer, Realtor® and national auction coordinator for Keller Williams Realty, Winchester, Va. “Homeowners are committed to selling so there aren’t long negotiation periods, and buyers can often close on their new home in fewer than 30 days. Auctions also attract qualified buyers since most auction houses require that potential buyers have financing in place and present written loan approval before the day of the auction, as well as a nonrefundable deposit – typically 10 percent of the home’s value.”
“There are three main types of property auctions,” said panelist Randy Wells, president-elect of the National Auctioneers Association. “The first is an absolute auction; where the property is sold to the highest bidder, regardless of the price. Another type of auction is a minimum bid auction, where bids are accepted at or above an advertised minimum price. The final type is a reserve auction, where the seller has the right to accept or reject any offer that falls below a confidential reserve price.”
“Realtors® and their buyer and seller clients who are interested in auctions should visit as many auctions as possible beforehand to get a sense of how they work,” said Realtor® Cedrick Hunter, from Hunter’s Realty in Oak Park, Ill. “There are two main styles of residential home auctions – ballroom and onsite. At a ballroom auction multiple properties are auctioned off at one time, whereas onsite auctions occur at the property. Buyers can visit the National Auctioneers Association Web site or Realtor.com to find upcoming auctions and properties.”
A Realtor® can help home buyers locate and register with local auction houses as well as find potential properties. Realtors® can also determine the home’s market value, work with buyers to establish a bid limit, research the home’s history for liens, make arrangements to preview the property before the auction, and offer advice on having the property inspected by a licensed building or pest inspector.
“Buyers typically have plenty of time to inspect the property by appointment or during multiple open houses,” said Gehringer. “Before the auction begins, buyers should make sure they agree to the seller’s terms and fully understand what is included in the sale.”
During the auction, buyers have the comfort of seeing the home’s market value established. “A home auction typically takes less than 10 minutes. During the bidding process, buyers see what others are willing to pay for a home, so they don’t end up bidding more than is necessary to secure the sale,” said Gehringer.
The 2007 REALTORS® Conference & Expo is taking place at the Venetian Resort Hotel & Casino, Nov. 13–16, in Las Vegas. The meeting is featuring more than 200 conference sessions and 744 exhibitors. A record of more than 30,000 RealtorsÒ and guests from the United States and abroad are expected to attend.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
