Iowa's Auctioneer Jason Smith

Residential real estate auction revenue increase 5.3% despite housing market downturn

Overland Park, KS - In 2007 the gross revenue from goods and services sold at live auction grew 5.3% to $270.7 billion. In 2006, the auction industry sold $257.2 billion in goods and services at auction, an increase of 7.1% from 2005. The annual report was compiled by Morpace, Inc. on behalf of the National Auctioneers Association (NAA) which surveys auction professionals to determine the state of the industry, as well as track key auction specialties within the industry.

While traditional real estate professionals continue to face the challenges of a housing market downturn, the real estate auction market continues to be one of the fastest growing auction sectors generating $58.4 billion in 2007. Within the real estate segment (i.e. residential, land/agricultural, commercial/industrial), residential real estate auctions witnessed the largest growth, increasing 5.3% from 2006. Accounting for 32% of the total live auction industry, automobile auctions continue to be the largest sector of the industry generating $87.8 billion in sales. Charity auction revenue grew from $15.6 billion in 2006, to $16.2 billion in 2007, an increase of 4.1%. The overall number of live auctions conducted in 2007 increased by 4.6%.

"The live auction industry continues to grow at an amazing pace," said NAA president Tommy Williams, CAI. "More and more consumers are realizing the benefits of buying and selling at live auction. Consumers are now buying or selling their homes, purchasing art and antiques, or raising capital for charitable causes through auctions."

To assist consumers interested in real estate auctions, the NAA launched the first real estate auction multiple listing service (MLS) in 2007. Prospective bidders from across the world can access http://www.auctionmls.com/ to view upcoming real estate auctions ranging from residential, to farm/agricultural real estate. In addition to launching the first auction MLS, the NAA partnered with the Auction Network to develop the first 24/7 multi-media network devoted to the auction industry. Everyone from the enthusiast to the casual bidder can participate real-time in a wide variety of auctions taking place worldwide by visiting http://www.auctionnetwork.com/.

** Article taken from the National Auctioneers Association 1/23/08 News Release ** About the NAAHeadquartered in Overland Park, Kansas, the National Auctioneers Association (NAA) represents the interests of approximately 6,000 auctioneers in the United States, Canada and across the world. Founded in 1949, the mission of the NAA is to promote the auction method of marketing and enhancing the professionalism of its members through education and technology. In 2007, the auction industry grew by 5.3% with over $270 billion in goods and services sold. To learn more about Auctioneers, auctions and the NAA visit: http://www.auctioneers.org/.

For information on real estate auctions in Iowa visit our Iowa Real Estate Auctioneer website to learn about auctions or to book your auction.

Are you considering selling a home? Have a home you can not get sold? Have you considered the auction method of marketing?  Auctions are an ACCELERATED method of marketing.  When most people thing of an auction they think of a fast talking auctioneer.  The fast talking auctioneer is only a small portion of auction marketing.  95% of the work occurs before the Auctioneer even takes the podium.  The auction method of marketing is about MARKETING and not FAST TALKING Auctioneers. 

There is a growing trend in the United States and more and more people are selling their homes at auction.  Today the National Auctioneers Association(NAA) released new numbers about real estate auctions and real estate is the fasted growing segment of the auction industry.  You might think this is due to the current market condition but the numbers actually were measured over a 5 year period from 2003-2008.  You'll recall that time period is also the same time period when we experienced a sellers market and home prices were high.  According to the NAA real estate auctions have grown 46.6% in 5 years. When you think about that number it is overwhelming. The increase is due to several things and among those are better education of the public on the auction method of marketing, the publics more favorable opinion of Auctioneers as compared to real estate agents (I'm both) and certain cultural factors that make auctions less mysterious to the public.  Ebay's online auctions have made auctions commonplace and today's younger generation grew up with auctions, and other segments have become more familiar and comfortable with auctions through Ebay and other online auctions.  These things combine to make today's live public auctions a more appealing method of selling real estate.

Would you be comfortable selling your home at public auction?  I know your number one concern is going to be price!  You are going to be nervous that nobody will show up to bid on your home and somebody will be able to steal it.   Give me a second to show you something.  If your home is listed with a Realtor and say its been sitting on the market 180 days then isn't it already happening to you?  Nobody is showing up to bid?  Is the time and holding cost already costing you money? 

If you have already purchased a new home and are still making payments on the old home its costing you the mortgage payment, interest, taxes, insurance and upkeep (mowing - snow removal) for the second home.  How much is it costing you to keep the home listed?  If your monthly payment plus interest on the home is $1000 and your taxes are $300 and your home insurance is $75 then its costing you no less than $1375 per month.  Thats $8250 over a 180 day listing.  With a real estate auction there is a 30 day marketing period and a 30 day closing period, thats a total of 60 days from start to finish. Is a listed home even guaranteed to sell within the typical 180 days listing period?  Remember, I am both an agent and an auctioneer so I can comfortably say the answer is easily no, otherwise there would not be so many homes right now that have been on the market longer than that! 

With an auction your home is exposed to the market in an intense and accelerated way.  An auction is an EVENT and the center of attention is YOUR HOME!  Attention and interest is brought to your property.  All of a sudden your home sticks out, its not just ANOTHER listing in the MLS.  There are flyer's hanging all around, post cards are being sent out, its posted all over the Internet to auction websites, the MLS, blogs, advertising websites, its in the newspaper with its VERY own ad.  If you are listed with a Realtor some of that same advertising is done, only over a longer period of time at a much slower pace.  With a Realtor you do not get the individualized advertising like the flyer and newspaper ad. 

Think about the difference between a listing and an auction for a minute.  With a listing you start high with your price with the intention of having to come down.  After all you did not want to start to low and leave money on the table right?  Ever have a Realtor tell you "well we can always come down"   With an auction you start low and generate interest and at auction the price goes from lower to higher.  When the property is advertised correctly all interested buyers come to compete against each other.  This is the best form of appraisal.  The bidding will stop when nobody is willing to pay more for your home.  Now back to your concern someone could "steal" your home.  There are two types of auctions, reserved and absolute.  Absolute means you will sell your home to the highest bidder.  With a reserve auction you will be able to reserve your price, meaning ahead of time you set the price you will let your home sell for.  If bidding is above that price your home sells, if it is below that price your home does not sell. 

Here is another great benefit of an auction and one of the best I think.  YOU set the terms of the sale.  You will have no contingencies to deal with.  Ahead of the sale you and I sit down and discuss your options.  You set the sale date, you set the closing date, you set the down payment due at the sale and you sell the real estate AS IS WHERE IS!  When a Realtor brings you an offer the buyer is setting the terms by making you an offer.   With an auction you make all of the decisions, I advertised those terms and conditions, we state the terms and conditions just as the sale begins and any person bidding accepts those terms and conditions.  A 10% non-refundable earnest is typical the day of the sale.  If the buyer fails to close the earnest deposit is non-refundable and goes to the seller.  If you are selling a home that sells for $100,000 thats a $10,000 earnest deposit, a very motivating deposit for the buyer to close.  Statistics show that 99% of homes sold at auction actually close.

Finally, according to National Auctioneers Association 2007 Auction Industry Growth document released today  "Despite a slump in sales of new and existing homes in 2007, revenues from residential real estate sold at live auction grew a solid 5.3% from 2006, and 46.6% since 2003. What might account for this performance? One explanation might be the greater acceptance of the auction method of marketing among homeowners, buyers, institutions, and real estate professionals. Public recognition of the benefits and successful results of live auctions should bring even greater growth to this sector as the housing market recovers. As the sale of real estate through live auction has increased, real estate agents have discovered the opportunity that live auctions provide for quicker turnaround of property. Finally, Auctioneers' interest in marketing real estate has accelerated, particularly using multi-tract sales to increase a property's value."

I work with Realtors that bring me sale clients and you still get paid a commission on the sale.  If you are a Realtor and have a property or two you think may make a good candidate for auction please call me so I can show you how we can work together and you can still make a commission.  I know how valuable your clients are to you and by working together you have more options at your disposal to sell clients listings.

As an auctioneer its my job to get you top dollar for your home while you the seller pay less in commission since some of it is paid by the buyer through a buyers premium.  I do that by AGGRESSIVELY and INTENSELY marketing your home, bringing lots of attention to it and getting every buyer possible to your sale.  As an Auctioneer at the sale I represent the seller and the seller only.  Many are but not every situation is right for auction so give me a call to inquire about selling your home through the auction method or marketing today. 

Iowa Farmland Auction

View the Sale Flyer (takes a minute or two to load)March 5th 2008 at 10:00am

Stanton Community Center 205 Broad Avenue Stanton, Iowa

On March 5th we will be offering 235 Acres of land at auction in Stanton Iowa.  This farm is located west of Stanton The LEGAL DESCRPTION is E1/2 E 1/2 of Section 7, and W 1/2 NW 1/4 of Section 8, all in Township 71 North, Range Thirty-Seven, West of the Fifth Principal Meridian, Scott Township Montgomery County Iowa.  This farm is a high quality Iowa farm.

Tract #1:  Total Acres 80 m/l , Cropland 75.6 acres according to FSA. Taxable Acres 76.96.  Method of sale 76.96 X bid price to determine total sales price.  FSA Info

Tract #2: This tract will be 155 acres  more or less.  Cropland 141.3 acres.  Approximately 5 acres to be surveyed off at sellers expense for homesite at 2337 M Avenue.  Taxable acres 149.09.  Method of sale 149.09 X bid price to determine total sales price.  1.4 acres enrolled in CRP.

CSR (Combined Parcels) 74.8 overall average

FSA Data (combined parcels): Farm #804 Tract #1097  

Method of Auction: Auction will begin promptly at 10 am and the order of the sale will be Tract 1 then Tract 2.

Survey: Should Tract 2 sell the buyer will be given the opportunity to purchase the home and buildings, otherwise a survey will be completed at the sellers expense to remove the home and buildings from their current parcel. The survey will determine the property boundaries. Cost of the survey will be paid by the seller.

Minerals: All mineral rights owned by the sellers, if any, will be conveyed to the buyer.

Conditions: The sale is subject to all easements, covenants and restrictions of record.  All property is being sold on an "as is, where is" basis with no warranties or guarantees expressed or implied, made by the auctioneer, seller or seller's agent. All inspections are the responsibility of the buyers and at the buyer's expense.  Farm is leased through the 2008 season.  Lease available for inspection by buyer. 

Possession:  Landlords possession at closting subject to tenants rights until March 1, 2009.

Earnest Payment : A 10% earnest money payment is required on the day of the auction. The earnest money may be made in the form of a check or cash. The earnest funds will be held in the Cramer Realty, Inc. Real  Estate Trust Account. Your bidding and this sale are not subject to buyer financing, so buyer financing must be arranged prior to the auction.

Contract and Title: Directly upon the conclusion of the auction, the high bidder(s ) will enter into a real estate contract and deposit with Kramer Realty, Inc., the required earnest payment. The seller will provide a current abstract at their expense for review and opinion by the buyer's attorney.

Closing: The closing date for all tracts will be on or before 30 days after auction date.

Real Estate Taxes: Real estate taxes will be prorated to the date of closing.

NOTICE:  All equipment, livestock and machinery found on the property are not included in the sale and will be removed prior to closing. Property information provided herein was obtained from sources deemed reliable, but the auctioneer, sellers or seller's agent, make no guarantees as to its accuracy. All prospective buyers are responsible for conduction of their own independent inspections, investigations, inquiries and due diligence concerning the property. All sketches, dimensions and acreage figures in this information are approximate or "more or less".  Lines drawn on photos are approximate.  Any announcements made the day of the auction will take precedence over any other printed material or oral statements. Absentee or telephone bids will no t be accepted without prior approval of the seller's agent or auctioneer. Conduct of the auction and increments of bidding are at the direction and discretion of the auctioneer. All decisions of the auctioneer and/or seller's agent are final.