In my August article I outlined what I was seeing in the sudden surge of lake home auctions. I’d like to update you with what I have observed in the 3 months since and give you some information and advice if you need to sell your home and are weighing your options.
Approximately half of the homes that have been scheduled for auction have actually sold at auction. Several of the homes that had an accepted bid and technically sold, did not close and were placed back on the market.
The majority of the auctioned properties sold at a price comparable to what similar homes in the same neighborhood sold at recently. In the most recent auction as of the writing of this article, I felt that the sales prices were considerably under fair market value.
I am now seeing auction fees as high as 12%, generally the auction company charges a substantial, upfront fee for marketing to the seller which is retained whether or not the home sells. Another fee is collected from the buyer at the auction and that fee is considered earned by the auction company at the time the contract is signed at auction.
Most real estate companies will cover the costs of marketing and selling your property based on the commission they will earn at closing. My company charges a 7% commission on residential sales and we split that with another company if they bring the buyer. If you are willing to pay upfront marketing fees and price your property at or below market value, discuss this with your Realtor. He or she can put together an excellent marketing plan to move your property quickly and for the most profit to you.
As I stated in a previous article, auctions are simply another method of selling real estate. I have attended auctions by various companies and have felt they were handled professionally, with many of the bidders introduced to the auction property by their Realtor. If you are real estate savvy and have a lot of knowledge about values and the current market, you may be just fine on your own but since most auction and real estate companies work together sharing fees there is no additional cost to you and can save you both dollars and the more long term expense of making an error in judging the market.
I feel many of the sellers of auctioned homes would have realized a higher net profit if they had priced their homes appropriately while they were on the market and certainly would have sold their homes more quickly. I highly recommend to anyone considering buying or selling at auction; consult with a local, experienced Realtor before making a decision. If you decide that an auction is your best option, you still need someone with insight as to what home values are in various neighborhoods as well as knowledge about the history and pertinent details of a particular property.
The most recent auction company to come to the lake will hold their last auction this month then won’t return to auction again until next March. In the meantime, if you need assistance buying or selling here at the lake, I’ll be here.
If you would like a detailed sales report on your specific property type or neighborhood, or would like to ask a lake real estate question, contact Michael at 877.365.cme1 (2631) or cme@yourlake.com View thousands of lake area listings at www.cme1st.com You can also log your opinions on Michael’s real estate blog, www.AsTheLakeChurns.com
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