We know the same way of buying and selling isn’t serving buyers and sellers the way it used to. Heck, it’s not serving agents either. You the buyer and you the seller have so much more knowledge and do a ton of research before you even start to look at how to list your property. You are also more actively engaged in their home searches and marketing efforts than ever before. Knowing this, you are also demanding more services that are keeping up with trends. We’ve even heard rumors that consumers are fed up with agents charging 6% commissions and are demanding lower cost options, and they are tired of traditional marketing efforts and are seeking alternative solutions. The landscape of the residential real estate industry is changing rapidly and Audubon stays current on trends, successful methods and isn’t afraid to change how they do business to remain relevant and of the most help to our clients with more options; and lower cost. But we want you to know the difference between “too good to be true” arrangements. There is always a trade off. We’ll explain in an overview here:
0% Seller Paid Listing Fees
Sell your property through a residential auction for 0% seller-paid commission. With the growth of on-line bidding-based marketplaces such as E-bay, the demand for similar options for selling real estate has emerged. Online residential auctions offer the time tested and proven results that traditional auctions have provided but in a more accessible format. Best of all, it is standard for buyers to pay a premium or commission in addition to the accepted offer price.
You already know that most of the world’s most valuable items are sold through an auction process because it creates a competitive bidding environment which ultimately increases the sales price. For most people, their home is the most valuable asset they own and must be sold for the highest price possible.
Strategically showcasing your property through an auction would create transparent competition among a large pool of buyers and drive the offer prices higher.
Please keep in mind – a common misunderstanding: In most cases, people going the “DIY” or “FSBO” route think they won’t pay any commission at all. But know that if the BUYER has an agent, you’ll still have to pay their commission, which could be 3%. Remember, the buyer’s agent represents the best interest of the buyer — and you wouldn’t know the difference because you’re not entrenched in the real estate industry and local market every day morning until night.
If we were finding you a home and going up against a seller without an agent, selling it themselves, we’d employ every best practice and negotiating skill available to take care of you, our client. Suddenly that 3% they saved in listing it themselves can result in a 10% or more loss in selling price. You really need to think about the hassle of the paperwork, inspections and more, as well.
Disadvantages of selling by auction
- Sometimes, properties are “passed in” on auction day and, despite the owner still intending to sell over the coming weeks, it can upset or eliminate some potential buyers.
- Bidding is a fickle process and if, for whatever reason, bidding is slow, this can send an incorrect message about the true value of the home.
- Some potential buyers don’t like the competitive nature and immediacy of the auction process and won’t even bid.
- Now that auctions are highly regulated, many states require that buyers must formally register. Some potential buyers may not like this process and will not sign up.
- If you are in a hurry to sell, an auction offers the best chance of selling by a specific date, but there is no guarantee the property will sell or that you will receive the price you desire.
- Auctions don’t always necessarily offer you the best sale price, as the winning person only needs to bid marginally higher than their competitors. You’ll never be sure that they offered the maximum amount they were willing to pay.
- Most real estate agent auction contracts provide the agency with sole selling rights until the auction and then for a period of time afterwards. This then locks the vendor in with one agency for a defined period of time. In the event your property does get “passed in”, it’s a good idea to prepare for this by only giving the agency a specific period of time to retain exclusive selling rights after the auction (one month, for example).
As a home buyer – the downside to BUYING through auction – they are aware of this and your best buyers may shy away due to known factors they’ve heard of:
- LIMITED OPPORTUNITIES FOR INSPECTION
Often, auction homes are sold “as is.” While you may be able to inspect or preview a home during a pre-auction open house, that isn’t always the case. As a result, if you purchase a home through an auction, you should have additional funds for repairs and renovations.
- TITLE ISSUES
Auction homes may have title issues. Typically, the auction companfy will disclose whether or not they are guaranteeing the title. For distressed properties in particular, auction companies may not guarantee a clear title. This leaves the new owner of the home responsible for paying outstanding tax liens and unpaid utility invoices. To give you an idea of potential title issues, you can pay a title agent to run a title search before you bid on a property. The cost of this title search will not be refunded if you’re outbid, but the information you receive can help you decide on a price cap.
4.5% Seller Paid Listing Fees
Not interested in the auction process then list for 4.5% with a minimum of $2,500 and a recommended 2.5% cooperating broker commission. Benefit from maximum marketing exposure and exceptional service at a deep discount. Your listings will be professionally photographed, placed on the MLS, featured in online ads, on social media campaigns, have multiple open houses and professional signage. Sacrifice nothing and keep more money in your pocket! *If you were referred to us by a third party like Redfin, Zillow or another source that will be receiving a referral fee, the minimum commission may change.