Is Auction Right for You? Answer These 7 Questions to Find Out
Megan McCurdy Niedens | October 14, 2021
Selling your home is a big decision and requires lots of thought and research; I mean, that's why you are here, right? You want to sell your home or your parent's house, but is auction really for you? To answer that question, let’s dive a little deeper with a few of our own questions.
1: Is your home unique or hard to value?
After deciding to sell your home, the sale price is based on its value. To determine the value, an appraiser will look at comparable properties in your area. But, if there are no other homes like yours, how does the appraiser know what your property is worth? This is when auction comes to your rescue!
We like to say auction creates true price discovery, meaning the marketplace defines the value of your property through bidding. When you have a high-demand property, the best way to discover true market value is to invite every potential buyer to competitively bid on it. You'll discover who wants it the most, rather than use an estimate to determine an asking price. Through this process, auction not only provides you with a buyer but the buyer who will pay the most for your home.
2: Does your property have high holding costs?
While your home is on the market, you are still having to pay for taxes, utilities, insurance, and your mortgage. Every month it stays on the market is more expense to you. Auction provides a fast sale (see question 3) to save you money and move you into your dream house quicker.
If you are a landlord and your rentals cost you more than you make or need extensive repairs, it might be time to sell. Auction is the fastest and easiest way to get these properties off your books. (To learn more about these benefits, see the questions below). It can also help maximize your profit and give you a chance to continue building your portfolio.
In the same way, auction can benefit homeowners dealing with higher than expected costs. If your home or vacation home has huge utility bills, HOA fees, or you’re paying for more space than you need, a timely sale could be in your favor.
3: Do you want to sell quickly, with no inspections or repairs?
If you answered "yes," then selling your property at auction is your solution. After you sign an auction agreement, your property will sell within 30-60 days. Yes, it’s that fast!
At an auction, your home sells as-is, meaning it sells in its present condition without contingencies. A common misconception about auction is that buyers cannot perform an inspection. The truth is buyers are able to perform inspections to inform their bidding, but the sale is not contingent upon one. The buyer will need to factor in necessary repairs to their bidding rather than have an opportunity to negotiate seller making repairs.
Selling as-is saves you the time and stress that comes with back-and-forth negotiations, and more importantly, it saves money! This is the main reason estates and senior transition sellers chose auction.
4: Do you want a guaranteed sale?
While both have benefits, the type of auction depends on your motives and your property. If you want a guaranteed sale, an absolute auction is the solution.
Both methods are successful and your auctioneer will discuss the specific needs of your property and come up with the right solution for you.
5: Do you want a hassle-free process?
We can’t speak for other auction firms, but at McCurdy, we have a team in place to ensure that we are with you at every step of the auction, from signing to closing. Our goal is to take this process that is known for being stressful and simplify it for you. You can be as involved as you want or simply sit back and relax. While you do not have to do the work, like considering negotiations and repair requests, you still have total control over your sale. Our auctioneers will give their recommendations for the type of auction, but you will always make the final decision.
6: Do you want to maximize the competition in today's market?
In today’s market, buyers are many and listings are few. Finding a bidder for your property is not an issue, it’s figuring out which buyer will pay the most. As you may have guessed, this is a great time to auction your home! Auction uses this competition to the benefit of the seller and the buyer.
A traditional listing limits buyers and diminishes the power of a competitive market. Buyers are submitting their offers like a shot in the dark and hoping to come out on top. They do not know what other offers were and worse yet, are not given the opportunity to compete with these offers. Auction gets rid of this mystery by allowing buyers to bid in the open and compete against each other.
As a seller, this maximizes the competition already in the market and allows you to get true market value.
7: Is auction right for you?
Whether you want speed, ease, or profit, auction has a history of success.
If you answered yes to any of the questions above, then auction could very well be the best sales method for you. While our auctioneers make recommendations based on the property, what you want out of your sale matters most. Whether you want speed, ease, or profit, auction has a history of success.
Still, have questions? Call us any time or comment on our social media, either way, we are happy to answer all of your auction and real estate questions.