Profile picture for harryhappy

Selling a house via a reserve auction.

This was discussed recently on a real estate radio program and it sounds like a good
idea.  Of course, one should be prepared to accept less than market value.  How do these auctioneers charge?  If it doesn't sell is the charge the same?
  • December 12 2011 - Baltimore
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Answers (4)

Profile picture for the_country_hick
Yes, the auctioneer is going to charge you p-lenty. If you do not sell the house the auctioneer still did the same amount of work as if it did sell.

The problem with a reserve auction is the bidders know the house may not sell. That means many people will not waste their $4 a gallon gas to go to it. That could give a lower price than if it was a guaranteed no-reserve auction. If it was a no-reserve auction you would have to sell and might get very little.

I would not think this is the best approach.

  • December 12 2011
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The last auction I attended, the Buyer paid a six percent Buyer's premium, to the auction company. I do not know if the Seller paid anything. There are probably multiple ways to arrange the "commission". Auctions are becoming more popular. It is worth looking into. I would think that the Auction company assumes the risk of a "no sale". Call a few and find out. Let us, on Zillow, know what they say. I find it interesting. Thanks for posting the question.

Call this guy!
  • December 12 2011
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It would be nice to see statistics to back up the NAR talking points document. The document was primarily written for agents and lacks any attribution to back up their claims.
  • December 16 2011
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Each auction company works differently. I know of one that charges the seller a non refundable flat fee that ranges from about $800-3,500 depending on the estimated value of the home. The auction charges the buyer a 10% buyers premimum and they pay the buyer and selling agents fee out of that fee, generally it is 2.5% each. So for the home seller while they may actually get less at auction  in many cases they receive more because there selling costs are lower.
It is certainly worth looking into. just make sure you do not sign anything that obligates you to sell in a way that will hurt you. Many times theses auctions will produce bids that are lower than the reserve, at that time the auctioneer will take the highest bid to the seller to see if you would like to accept it.
  • December 31 2011
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