What image does the phrase “real estate auction” bring to mind?
Up until recently, it was probably a financial transaction carried out by a seller in dire straits such as foreclosure. Real estate auctions have never achieved the desirable reputations that art and antique auctions enjoy. But that’s changing.
Approximately $58.6 billion in real estate was sold at live-auction in the US in 2007. A majority of today’s auctions are not the result of distress situations, but a seller simply choosing a fast and cost-effective method to sell a property.
Auction allows the seller to eliminate virtually all long-term carrying costs, passing the savings directly to the purchaser in the form of a reduced price. As a result, sellers receive immediate cash while buyers purchase properties at a fair price determined by competitive bidding.
While automotive was the largest sector of the auction market in 2008, accounting for gross sales of $83.1B, one of the fastest growing auction areas that same year was the residential real estate sector. In fact, the fastest growing auction areas from 2003-2008 were:
- Residential real estate (39.2% increase from $11.5B in 2003 to $17.1B in 2008)
- Land and agricultural real estate (33% increase from $19B in 2003 to $26B in 2008)
- Commercial real estate (27.4% increase from $11.8B in 2003 to $15.5B in 2008).
Even in this poorly performing economy, real estate auctions have continued to grow, and with it, opportunities for REALTORS®. The REALTOR.org Auction page is full of resources, news, and industry trends that empower you to confidently navigate this swiftly growing field.
The benefits of auctions don’t just fall to the buyers and sellers. Auctions promote REALTORS® by bringing in people in to look at all listings, not just the auction listing. It exposes the property to many potential purchasers, and, when successful, auctions often result in referrals and return business. Read more about the three types of auctions here. Who knows, the next thing the phrase “real estate auctions” brings to mind, may be an auction of your own.