Sarah Sonke, Auctioneer/Broker

When buyers compete the seller wins! No question but there are tons of buyers for real estate out there. They just don't want to overpay. A professionally run auction is an efficient way to bring buyer and seller together quickly and seal the deal. Last Saturday we auctioned 8 new construction townhomes for a builder. He'd built 12 units and over a period of 16 months had only sold 3. When he became goal-oriented instead of price-oriented, his project became an excellent candidate for a professional auction.

The terms and conditions were unusual in this auction and were written to specifically meet the need of the seller. In turn, he allowed buyers to name their price (over a low minimum bid).

There were 8 bidders at the live auction and others bidding offsite. Within 24 hours we had a total of 16 auction contracts in hand (multiple offers for each unit). Seller would have liked more money. But when you have that many buyers and they stop bidding - that tends to be an accurate picture of current fair market value. Best yet, a professional auction license allows me to handle all 16 offers at once and keep them all active at the same time - not an easy task.

Bottom line - there are buyers ready, willing and able to buy. Show them a good deal and let them compete at auction. When buyers compete, the seller wins!

What's it like auctioning your own home? Here's my story...

I'm a professional real estate auctioneer/broker and have auctioned over 500 properties including real estate for clients, friends and family. Frankly, I would never consider selling my home using any other method. Having been in real estate for 25 years, I've grown to love and believe in the auction method of marketing. I love the efficiency and finality of auction time lines and contracts. It's exciting to put buyers and sellers together in 30 days and never have a deal fall through. Frankly, I just don't have the stomach or patience for conventional real estate marketing with the long negotiations and heartache of deals that fall through on inspections and financing. Add a buyers market and tight credit and those problems become compounded.

The auction was scheduled for April 21 at 3 pm and the accelerated marketing program for it started 5 weeks earlier. The budget was about $3400 and it included a mix of internet, direct mail and print ads. The 4' x 4' custom sign was the first indication of the sale and it garnered immediate attention. The home was open just about every Sunday from 1-3 pm for inspection and there were 12-30 parties that came through each week. In addition, local agents showed the home to clients.

Auction postings were done on all the usual auction real estate sites as well as yahoo, google, trulio and zillow. I paid to have a featured ad on zillow that would appear each time some one entered in the same zip code. All in all, this ad was seen by over 6,000 prospective buyers. Didn't spend much on newspaper ads but did send a nice color postcard to everyone within 3 miles of the home and heard a lot of comments from people who received it in the mail.

Approximately 30 people downloaded the auction bid package from my web site and I sent them regular updates when new information became available. Additional documents including disclosure agreements and a recent professional inspection were posted on a box.net site where they could be readily downloaded. This site allows me to see how often these documents are accessed and that's another good data point to see how the marketing is working in case it needs tweaking. Another excellent tool is google analytics.

Auction day was picture perfect and lots of neighbors came to watch the action. The home was under contract that night with a closing date that perfectly meets my needs. There are no contingencies in the contract for repairs or buyer financing.

Final price came in $200 lower than what a local broker predicted the house would bring on a conventional sale after negotiations for repairs.

Am I happy? You bet!

Real estate auctions attract a lot of buyers and many come to the auction unrepresented. Since I've witnessed agents trying to sign up buyers 2 minutes prior to the start of an auction, we now require agents to register their buyers a day prior to the auction. It protects everyone, especially buyers who do need help in checking comps, but not 2 minutes before the auction begins!

Now that problem is solved another one pops up and here's the scenario: It's a live auction of a half million dollar home and there's a group of about 40 people gathered. Just after we start going over the terms and conditions of the auction, an agent walks up and starts handing out flyers for his nearby listing (similar price point) to everyone in the crowd. Some people booed him and we asked him to leave. He protested that it was a public auction. He was soliciting right in the middle of our auction. Do you think any buyer who witnessed this would ever want him to represent them? Shameless!

I recently wondered why there are so many buyers at our real estate auctions that come without representation. So decided to ask the buyers and find out. Here's their range of responses:

1. My agent told me to never buy at auction so I decided to come without them.
2. My agent doesn't understand how auctions work. They didn't seem to want to figure it out. I figured it out on my own by calling the auction company.
3. I don't like real estate agents (that always strikes me funny because I'm an agent and they don't seem to realize that).
4. My agent didn't want to come to the auction with me.

Here's the thing: We often pay a higher buyer agent commission than a conventional sale. And in the history of our company, we've never had a deal fall through. That's means a substantial paycheck for a buyer agent that is paid within 30 days of the auction. Isn't that worth expending a little effort?

The simplest way to learn more about auctions is to attend one. And I'm not talking about a foreclosure auction at the courthouse step - that is not an auction by choice and it's generally conducted by a sheriff or court clerk, no a professional auctioneer. Talk and ask questions of the auction company. And above all, take 5 minutes to download the complete auction bid package and read it. Most auction companies take great pride in creating very detailed information for buyers and their agents, sometimes even provide pre-auction professional inspection reports.

Bottom line is that representing a buyer at auction is really easy. The smart agents that have a lot of get up and go are willing to take some time to learn this niche. And they're earning great paychecks in a really quick timeframe.

Have you represented a buyer at auction? Share your story!

How many NAR Realtors are there? About 2 million?
How many NAA-member auctioneers are there? About 6,000.

Think about those stats for a minute. There are approximately 6,000 professional auctioneers who are members of the National Auctioneer Association. And of those 6,000, only a percentage auction real estate and are probably also members of NAR. Why so few? Because it's not easy to get licensed and it's not an easy profession. Estimates are that it takes 6-8 years to train a good real estate auctioneer. That training timeline is simply too long for many people who might otherwise be interested in the profession.

As a professional real estate auctioneer, I'm required to hold both a broker and auction license and my company holds both a real estate brokerage firm license and auction firm license.

I'm a Realtor and member of the National Association of Realtors. But I sell real estate through auction and am a member of the National Auctioneer Association. I don't yet have any certifications from NAR but am working on my CCIM. I have a number of certifications from the National Auctioneer Association and have found that those outside the auction industry don't know what these are.

For a complete explanation, here's a link to the NAA site: http://auctioneers.org/web/2007/06/education.aspx

CAI - Certified Auction Institute - The Certified Auctioneers Institute is an executive development program and the most prestigious designation awarded in the auction industry. It's an annual week-long course held at Indiana University in Bloomington, IN and candidates attend three years in a row. I've just completed my second year and will finish the program in 2010. There aren't very many auctioneers who hold the CAI designation.

AARE - Accredited Auctioneer of Real Estate. This is an advanced real estate auction training class. If you've already been to auction school, this is the next course to complete for a thorough education in real estate auctions. The course consists of 3 classes that are 2-days each. In order to earn the designation, candidates must complete and document 10 real estate auctions. I found this class to be essential in my auction education and am proud to hold the designation. I understand there are fewer than 500 of us who have taken the class and met the requirements of the designation.

You can take the NAA classes even if you're not a member of the association. I would highly recommend the AARE class, especially since so many people going through auction schools right now are brokers. They get out of auction school and have no idea what to do next. This class is a great place to land.

If you'd like to find an experienced auctioneer in your area who specializes in real estate auctions, you can use the NAA directory of members, search by location, and see what designations the auctioneer holds.
Here's a direct link to help you find a member of the NAA: http://www.auctioneers.org/custom/directory/auctioneer/Default.aspx