We keep hearing “I’m seeing auction signs everywhere” and there’s a reason for that. In a strong market where it’s common to hear of multiple offers and properties only being on the market for a couple days, it means there is demand and competition in our market.
Auction is actually the only sales method that capitalizes on that competition to ensure the seller obtains the highest possible sales price for their property, which is why we are seeing more sellers attracted to the auction method.
What Type of Properties Sell Best at Auction?
A specific type of real estate that we have seen an increasing demand for is Rural Residential properties. At McCurdy we define that as a home on a small acreage. We are seeing an overwhelming increase in buyer’s looking specifically for this type of property. In the last 18 months McCurdy has had over 375 registered bidders for our auctions of Rural Residential properties.
Auction is the perfect method for this type of property for these reasons: High demand, strong competition, uniqueness, and simplicity.
It seems here in the heart of Kansas the dream is to own a beautiful home, with a little elbow room from neighbors on just a few acres, while close enough to get the kids to school, hit your favorite restaurant, and make a run to the grocery store. Even the way we decorate today screams country chic, so it makes sense that we are seeing buyers gravitate to this country living with city amenities.
Demand is what feeds competition and competition is what fuels auction.
When you have an attractive and high demand property, the best way to discover true market value is to invite every potential buyer to competitively bid and find out who wants it the most, rather than use an estimate to determine an asking price. The auction platform is frequently exceeding seller’s expectations specifically on Rural Residential properties.
Rural Residential properties are challenging for real estate professionals to determine an estimated value. REALTORS and Appraisers utilize reason sales comparables to assist them in determining a value for a home. The problem with using this method in the Rural Residential sector is that usually these homes are custom or one-of-a-kind with unmatched amenities in the market place. This can result in mispricing the home and either leaving money on the table for the seller if priced to low, or sitting on the market for an extended period of time if priced too high.
The uniqueness of these properties is their best asset!
We see buyer’s fall in love with a winding driveway, private pond, and maybe even a small barn or shop. Auction allows the buyer’s to truly determine how much they value each of these features. It’s not just buying a home; it’s buying a lifestyle.
Simplicity and transparency appeal to buyers and sellers.
One of the other factors that we are seeing both buyers and sellers enjoy about the auction method is the simplicity and transparency of the transaction. Auction eliminates the price haggling and negotiations after a home inspection, while still allowing the buyers the ability to obtain financing and thoroughly preview or inspect a property prior to bidding. At auction there is no such thing as several other buyers being interested and making non-disclosed offers. Being able to literally watch as others make an offer right beside you at an auction provides transparency and comfort of a fair and level playing field.
We are seeing growth in auction because we provide an alternative to the traditional real estate method that creates competition, provides a transparent home buying experience, and is able to exceed seller’s expectations.