The auction method has been well accepted and a time honored way of selling and buying in the agriculture Industry. We also recognize the best things in the world are sold at auction, including the best cars, the best horses, the best livestock, the best antiques and collections, and so forth. In fact the largest auction the world happens each and everyday… that is the New York Stock Exchange… the stock market. Auctions are becoming more popular in the residential real estate area as well. According to Morpace, a research group hired by the National Auctioneers Association and Foundation, Real Estate is the fastest growing sector of the auction industry. They also conclude that more people are turning to auction to buy real estate. Auctions are becoming more acceptable. The following are some of the benefits to buyers and sellers using the auction method of marketing.
Benefits to the Seller:
- More Efficient as the auction method eliminates waste - Including carrying costs associated with holding, which results in a higher net return.
- Fair market value is achieved in a competitive, fair, open, and transparent atmosphere.
- Seller is able to capitalize on time saving of money. Lowderman Auction Company has maintained an average 60 day period from listing to closing.
- Terms are set forth by the seller.
- Auction Prices reflect the market. The seller can stipulate a reserve or minimum, but there is no price ceiling, where as a listing, the property has a price ceiling.
Benefits to the Buyer:
- The method brings all interested parties together in a specific point in time and puts everyone on the exact same playing field with the same set of terms and conditions.
- Process is open and transparent
- Buyers are dealing with non-speculative prices and the high bidder has paid just what they had to. Each person present is able to take part in determining fair market value.