Need to get rid of a property in a hurry? The goal of an auction is to sell for a price you want on the day of your choice. In other words, get the house sold at a good price quickly! You can, of course, use an auctioneer or follow these guidelines to do it yourself.
First and foremost in getting any property sold anywhere in any condition is marketing. If buyers don’t know what you have, where it is, how much it costs, or even that it’s for sale, what are your odds of selling it? Market, market, market. Marketing is a topic for another post.
Whenever you sell a property at auction, you’ll want to “sell with reserve”. This simply means that you have a minimum price for the property and it has to be met before you will approve the sale. An “absolute auction” is one where the property is sold to the highest bidder no matter what the price. If only one bidder shows up and they bid $25 at an absolute auction, that could be a problem!
Know the value of your property. If it sells for your asking price, you want to be sure it will appraise for that so your buyer can get a loan.
Make a list of needed repairs and disclose any you do not do yourself so potential buyers are informed. It’s best to get an inspection so you and any potential buyers know ahead of time what a buyer’s inspector will find. If they’re not buying with cash, selling “as is” will rarely be possible. Banks won’t loan on a property “as is”. They want to know what they’re loaning against.
At the property on the day of the auction be sure to have:
- sign-in sheets
- flyers with property photos and information
- printed rules for the auction
- copy of the appraisal for buyers to view
- copy of the inspection for buyers to view
- copy of termite report, survey or any other reports you have for buyers to view
- bid sheets
Everyone must sign in. Get their names and contact information. Allow them to browse the property at their convenience and ask questions.
If they want to bid, make sure they receive a packet of property information and that they place their bid on the bid sheet.
That evening, call the winning bidder or bidders if they need to consider a higher bid until you determine the winning bidder. Sign a Purchase and Sale Agreement with the winner and let the next two people in line know that you will inform them if the sale does not go through.
Contact the mortgage lender and closing attorney and stay on top of everything until this sale closes!
Here are some resources for auction information:
What’s been your experience with property auctions?