How auctions differ from traditional sales?
Comments (0) The Orlando Regional Realtor Association (ORRA) has create a white paper-style Realtor Value list called “The Critical Role of the Realtor in the Real Estate Transaction” to its members for free download, so they can use the report to demonstrate their value.
Fair warning it’s a pretty length report with 180 points, some real estate agents do more, some do less. I’m one who believes in doing less, while doing more, it is called being efficient and who ever wrote the report never sold property at auction.
Let’s go through some of the main step that I do for auction of properties, it won’t take long.
They start with pre listing activities, but before you to pre-listing, they skip the whole step about prospecting, which is where a lot of agents spend most of there time these days, trying to find that home owner who is going to list there home for sale or find the buyer who wants to buy.
Pre Internet, everyone used the face to face approach, direct mail, referrals and newspaper advertisement. TV and radio were places that Brokers advertise, not agents. Today, we have all kinds of ways to find people, or to put another way, to have people find us. Agents still use the methods mention above, but now the Internet has unleash a whole new standard. Directory sites, advertising sites, social networks, TV and radio on the Internet and on traditional tv and radio, so there is a ton of new technology agents have to find and use including phones, camera’s video, publishing software, blogs and websites.
Any client that can’t see value in that should come work in the field. Agents are spending a ton of time & money learning and using these tools. Many of the tools have to be purchased or paid with monthly subscription fees by the agents.
As far as prospecting goes, I target specific price range and neighborhoods for listings prospects. I utilize online website for more general targeting to wider audience. I also find prospects through live and online auctions, an target market that the typical agent can not access. This makes me efficient and keeps my expense down.
My pre listing activities include a phone interview with the owner, and I will do a quick valuation to determine the margin and probable marketing plan, different homes warrant differ advertising. Wow that is short compared to their list of 20 points, the big difference that I see is agents spend a lot of time coming up with the price, I don’t care about the price, I’m not buying the home, the only price that matters is the one the buyer comes up with. A lot of the other items listed are from the days when information was not online.
The next step is the “Listing appointment”, This basically where I write the contract, review marketing plan, measure the rooms, take pictures/video, put up signs, put locks on the doors and get a check for marketing expenses.
Yes, clients pay for marketing expenses upfront, based on specific plan they have chosen rather than the plan created for the average listing, the company plan, have it subjectively rotated into brokers ad rotation.
Now that we are under contract the real labor of the deal kicks in. The home is entered into Multiple Listing Service, on numerous website, and on the many auction websites where you will not find traditional listings, so you get a little more coverage. Home inspections may be schedule if client choose to do it, I recommend it. I create a PIP(Property Information Packet) which contains on the information on the property such as tax summary, property disclosures, listing flyer, Terms and conditions of the auction. We then complete the marketing plan and prepare for the auction. That takes us up to about 109 on there list, This does seem like much but it is the most important part of the deal, it’s what gets the buyers to the auction. We compress the marketing time of 3-6 months of typical home in to 2-4 week period.
The home is open for inspections, the auction is called, sale is awarded and the contracts are signed. That takes a couple of hours, in traditional sale this can take days to weeks to get an accepted contract with no contingencies.
What’s left? Scheduling the appraisal, reviewing the hud, write the auction summary and attend the closing.
They may seem simple, it is a lot of work in compressed timeframe. It brings buyers to the table in urgent manner, ready to make a decision. It is efficient and fair!
