The two primary methods used in Marketing of Real Estate are; Auction and Listings. Each method accomplishes the goal, however each are very different in their application. Sellers should compare then choose the plan which best suits their personal needs. See examples.
Listed For Sale vs Auction:
Familiarize yourself as to how each method functions; then make your choice.
I. Listed for Sale:
1. The asking price; the first step is very important. Most sellers are guilty of asking too much. Setting the price too high cost time, money and sales opportunities.
2. The process works something like this: Buyers make offers; negotiations the place; an agreement is reached; a contract to purchase is signed. The Contract of purchase is full of contingencies; therefore, know what you are signing.
3. Common contingencies are:
a. Subject to buyers’ ability to obtain a loan.
b. Subject to seller paying buyers’ closing costs.
c. Subject to an appraisal. NOTICE: Just because a buyer and seller agree on a price, is no guarantee the property will appraise for the sale price indicated.
d. Subject to a “Home Inspection” and repairs. Who pays for repairs? Make sure the Sales Contract is clear on this point.
e. What happens to the “earnest money” if the buyers can not obtain a loan? Most contracts call for a full refund if any of the contingencies fail to be satisfied.
1) Make sure you understand all aspects of the Sales Contract; your responsibilities as well as the buyers’.
2) Be patient; the process takes time; usually longer than you anticipated.
3) Do not count your money until after closing. Things happen. Not all contracts result in a closing.
II. Auctions: (Read more on our Auction page)
Auctions are possibly the most expeditious marketing method available.
There are several good reasons why sellers choose to sell by Auction.
- Time Factor. In most cases we can conduct the live Auction Sales event within 30 days after the Contract of Employment is signed.
- Closing normally requires 30 to 45 days.
- Sellers determine the game rules, terms and conditions.
- Properties may be sold in "As is condition."
- We collect Non-Refundable Down Payment money; not earnest money, Big Difference; this is the glue that keeps deals together.
- Buyers help pay cost and fees.
- Offers are Not Subject to Contingencies.
- The most important fact is that Buyers compete for the right to buy. This process of bidding establishes the true price.
- There are two types of Auctions; Absolute and Reserve
An Absolute Auction requires the property sells to the High Bidder without a minimum or reserve price. This type Sale sends the message to Buyers; We are serious; come be serious with us and bring your check book.
Reserve Auction requires a minimum acceptable price must be obtained. This type auction is often used because there is a debt on the property which must be paid in full.
Serious Sellers attract Serious Buyers; Serious Buyers Compete.
This is the "Key Factor" to marketing by auction.