Real estate auction clients: Keep your fish in the boat
Providing real estate selling choices is only part of what goes into the real goal: keeping your clients satisfied.
By NAA Staff
All real estate sellers want the same thing, the same three things to be exact. Sellers want a fair price for their property; low or no terms; and they want to close the transaction at their choosing.
As a real estate broker for 22 years, Manson Slik, CAI, AARE, CES, is well versed in meeting the needs of sellers. He is a partner with Gordon’s Estate Services Ltd., Brokerage and an instructor for the NAA Accredited Auctioneer of Real Estate (AARE) designation. His company specializes in real estate auctions and estate settling services in Ontario, Canada, to help seniors quickly sell their homes as they transition into other phases of their lives. This can include downsizing into smaller homes and moving into assisted living facilities.
“In simple terms, a real estate auction is the firm and time-defined sale of real property by competitive bid,” Slik says. “How you get there is not as important as achieving the goal because all three of these things – auction, sealed bid, and accelerated listing – all deliver the same result. They all deliver fair price, low to no terms, and a closing that will suit the seller.”
About 10 years ago, Slik says he and his business partners came to the realization they were losing potential clients who did not realize the potential when they suggested selling their homes using auction services.
“We were getting sick of throwing the fish out of the boat,” he recalls.
Mike Brandly, CAI, AARE, who also teaches AARE, says Slik is now a well-known advocate for Auctioneers to use his definition of real estate auction with clients in place of simply using the word auction. Auction can be perceived negatively by sellers based on a lack of information and myths suggesting that auctions are only for troubled pieces of real estate.
While avoiding industry lingo that doesn’t convey the seller’s need to receive a fair price, avoid terms, and control the closing, Auctioneers must also choose the best method for the selling the client’s property.
Selling property using the traditional auction method is a great strategy for sellers who wish to move their property on a quick timeline. Advertising property for auction creates a sense of urgency and provides multiple bidders competition to buy generally leading to a higher price when compared to negotiating with a single buyer.
The process of a real estate auction is fairly straightforward. The Auctioneer and seller decide on an auction date and the type of auction to be conducted. Auctions ensure a firm sale, defined timeline for sale, competitive bidding, and broader exposure to buyers.
Slik recommends Auctioneers suggest a sealed bid method of sale to clients who need to be inclusive of conditional bids. Sealed bid scenarios are for complicated properties that are potentially undesirable or valued significantly different by varying parties.
This method is the opposite of an open transparent auction in that bidders submit competitive sealed bids with the goal of being the winning bidder. Bidders do not know what each other’s bids are. Benefits of sealed bids include a firm sale, defined timeline for sale, competitive bidding, and privacy. The sealed bid process is also generally easier for sellers and buyers alike to understand.
Accelerated listings are the method for sellers who can answer every conceivable question a buyer might ask and have their homes ready to go. These properties have inspections done, are packaged impeccably, and are priced exactly at their value to sell quickly.
“These properties are end-game priced,” Slik says. “There’s no smoke and mirrors here.”
Slik acknowledges that accelerated listings might not seem like the ideal method of sale. Many would say a traditional auction is better and will bring in more money. Still, Slik says it’s all a matter of satisfying the seller and 60 percent of accelerated listings actually go on to sell at or above asking price.
“If I have a contract signed and the client chooses this method, then I still get paid. I’m keeping the fish in the boat because the client is satisfied.”
This article was an excerpt from a presentation given at the 2017 NAA International Auctioneers Conference and Show. Full audio of the presentation will be available in the NAA Knowledge Center soon. You can also check out other valuable NAA content here.
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