Types of Property Sold at Auction

Art, Classic Cars and Antique Furniture

Think for just a moment. The last time you heard about the “unbelievable price” that a piece of art work sold for, how was it sold? Was it at auction? The last time youheard of a classic car bringing millions of dollars over the perceived value, how was it sold? The last time you heard about a piece of antique furniture selling for $200,000.00 more than appraised value, how was it sold?

Stock Market

The millions of shares of company stock that bring billions of dollars daily, how are they sold? Yes, almost every important market functions daily as a result of the auction industry or auction method of sale. Which means that competitive buyers are bidding against one another until the best and highest offer is obtained for the product or commodity.

Automobiles

You want to purchase a used car? Maybe you want to sell or trade in a used car. The retail value of that automobile is determined in part at the wholesale auto auctions where appraisal guide representatives keep track of the auction market to update their appraisal books weekly.

Cities, States, Counties and other government agencies sell their excess vehicles at auction to the highest bidder, to obtain fair market value.

Fish, Cattle, Commodities, Treasury Notes

On and on the daily auctions go. Fish are brought from the sea to the fish auction market, before finding it’s way to the retail market. Cattle are sold at auction before being sold to the retail meat markets. The price we pay for meat in the grocery store is determined in part by that cattle auction. Produce (vegetables & fruit) is sold at the local produce terminals at auction usually early in the morning, before making it to the local grocery stores and produce markets, while you are still sleeping. Commodities, oil, ores, metals (gold & silver), treasury notes all fluctuate regularly based on supply and demand of a competitive bidding auction market.

Other Auctions Necessary to Business

When individuals or corporations default on loans, millions of dollars in personal property and real estate are sold in foreclosure auctions every week. When storage rental leases are broken, personal property is advertised and sold at auction to empty the premises and help repay the real property owner who has been defaulted against. Courts regularly use auction as the fairest method to settle property issues, including unpaid property taxes, and other types of taxes.

Real Estate

All types of real estate are sold using the auction method of marketing and sale. In Australia for example it is reported that most of the real estate is sold at auction.

The amount of real estate sold at auction in the United States is growing by billions of dollars every year. When do auctions work best? When there is a high demand for a property, and the property is being offered for sale for the first time, auction works best. Properties that are unusual and therefore difficult to appraise also usually have excellent results at auction. In an economic downturn when property needs to be sold, only an auction can create the necessary interest, excitement and competition needed to bring about a quick sale at fair market value.

When selling multiple properties or offering large parcels of land, the auction method of sale is the only method that permits the selling of multiple properties or tracts of land at the same time.

This is beneficial because it allows all interested buyers to bid on small individual parcels, groups of parcels or the complete property as a whole. All can bid. The next door neighbor can bid on one or more parcels. The large corporation across town or across the world can bid on groups of parcels or the whole package. Each bidder desiring a different property or group of properties, competing against each other. This type of auction allows the seller to receive all offers at the same time, thus maximizing the end result for the seller, while giving all bidders the same opportunity to buy.

Real Estate to Sell? Think of Auction First

Auctioneers throughout the United States report similar results in the sale of real estate at auction. Approximately 90-95% of all real estate offered at auction is reported being sold.

Under the conventional real estate broker listing, a subjective asking price is assigned to the property. If the price is too high for the current market, the listing will likely sit until many weeks or months later the price is lowered enough to cause a buyer to respond with an offer. When offering real estate at auction this does not happen.

Offering real estate first by auction, while it is fresh, often results in a higher than expected sales price. It is not unusual to find that there are several buyers who value a property much higher than an appraised value, or the owner’s perceived value. The excitement created at an auction allows the opportunity for buyers to continually and quickly change their perception of value, as they see others actively bidding for the same property. In a conventional real estate sale listed with a broker, this might happen occasionally on a hot property when two or more buyers are presenting offers at the same time, therefore, each having to raise their offer and possibly paying more than asking price. When real estate is being sold at auction, this is exactly what an auction is designed to do for each and every piece of real estate. That is a major purpose of the auction.

Auction Shortens the Selling Time

Using the auction approach, you can very quickly bring your property to the market and sell according to your terms, on the day and time of your choice. The normal marketing and selling time for most real estate is approximately 60 days from signing the auction agreement to closing on the property. The property sells with no contingencies such as inspections, repairs and financing, which can cause delays in a conventional real estate transaction. Since the seller sets the terms of sale prior to the auction, negotiations are eliminated for the seller. Price is the only thing left for negotiation at auction.