In the past few years, the world has watched paintings, exotic cars, properties, etc. sold at auctions for millions.
The time has passed when people thought of auctions as a last resort sale or as a means of liquidating assets that could be sold no other way than the court foreclosures. Today the modern auction method just a normal way of disposing your assets in an open market for an immediate sale at the highest possible price.
Why sell by the way of auction? Essentially, it is simply because of the two most valuable commodities in business that is time and money. Lengthy and costly selling periods are eliminated with a professionally conducted auction. It is often pointed out that a property that could not be sold at any price is sold for top dollar in minutes at a properly conducted auction. Why? Because the property will be promoted and exposed to a multitude of interested buyers.
The auction method, once viewed as a last resort for marketing undesirable property, has come full circle, primarily due to the many advantages this marketing method offers for non-distress owners. Sellers are able to sell their property within their time frame, thus capitalizing on their investments within a short period.
For buyers, auctions provide the ability to pay real value for a property, in fact, the market drives the value. This value is substantiated in an auction market by competitive auction bidding and offer the buyer an opportunity to buy at market price, with the added confidence of not over paying for the property.
Therefore, it’s no surprise that buying and selling at an auction presents a sound business decision for all parties involved.
ADVANTAGES OF THE AUCTION METHOD
- The seller determines the date and time of the sale.
- Timely auction allows the seller to reduce holding costs.
- An auction environment arouses the competitive spirit among the prospective bidders
- Setting a specific date and time of sales creates a sense of urgency and forces the prospective buyers to the point of decision.
- The seller can set terms and conditions of the auction and avoid lengthy negotiations of price and terms associated with traditional sale.
- An advertisement program is tailored to the seller’s property, which will attract the largest possible number of potential buyers. This insures a true market value for the property as determined by the market forces.
- Auction allows the price to increase freely. This often leads to a higher sale price than would have been obtained by traditional sale.
- Historically, when the market is on an upswing, public auctions have been known to establish the highest price. When the market is declining, an auction will capture the current market price before values drop.
- The competitive bidding format creates confidence among buyers when they see other bidders willing to pay similar amount for the property.