Iowa's Auctioneer Jason Smith

Its proving that previous big gains in the real estate market by the auction industry are not going to be topped this year.  With big gains in the last 5 years, and growth in the last 6 in the real estate market crisis the National Auctioneers Association is reporting a decrease of 2.7% in real estate auctions despite growth of 2.3% in the live auction business.  As we hit what may be the worst of the housing and mortgage crisis that comes as somewhat of a surprise to some that felt the auction industry would see gains again this year.  At this point I think and agree with Tommy Williams assessment of the challenges auctioneers are now seeing.  As values have continued to fall we are at a point where sellers are just not willing to accept that their home could actually be worth what the market is bringing today.  Despite the relatively small decrease in real estate auctions this year they are still at an all time high and a very valuable option for many sellers.

While these statistics are all national industry wide stats I think it would be interesting to see a state by state breakdown which isn't possible.  If my suspicion is correct you would actually see gains in real estate auctions in some states and losses in others.  Without any hard numbers or facts to back it up the best I can say is that, at the very least the number of real estate auction in Iowa has increased this year and I've seen more and more auctioneers jumping into the real estate business.  As an auctioneer I'm also seeing more and more Realtors taking notice and partnering with auctioneers to get homes sold here in Iowa.  I guess we'll never know for sure but my suspicion is that real estate auctions are more popular than ever here in Iowa.

Below is a release from the NAA about the current state of the auction industry as reported at this years national convention. 

National Auctioneers Association Estimates Industry to Grow 2.3 Percent in 2008
Decrease of 2.7 Percent Reported in Residential Real Estate Market
 
Nashville, TN, July 9, 2008 - During the opening session of the 59th International Auctioneers Conference and Show in Nashville, Tennessee, Dr. James Leiman of Morpace, Inc. announced the results of the industry's mid-year report to the members of the National Auctioneers Association. Dr. Leiman reported that if current consumer trends continue within the live auction industry, gross sales will grow 2.3% in 2008. The 2.3% percent growth during the first half will result in estimated gross sales of goods and service sold at live auction totaling $276.8 billion. This translates to six consecutive years of growth within the industry. In 2007, the live auction industry grew 5.3% with over $270 billion in goods and services sold by auctioneers in the United States.
 
While automobile auctions continue to dominate the industry with $87.8 billion in gross sales in 2007, the fastest growing sector of the live auction industry is real estate auctions. Real estate auction sectors include: residential, commercial/industrial and land/agricultural. In 2007, the auction industry sold approximately $58.5 billion in real estate assets. Total sales growth within residential real estate auctions has grown 46.6% between 2003 and 2007. Dr. Leiman reported that the pace of real estate auctions has slowed and gross sales have decreased in the first half of 2008. Gross sales in residential real estate decreased 2.7% in residential real estate, 7.1% in commercial and industrial real estate, and 2.3% in land and agricultural real estate.
 
"While auctioneers have witnessed tremendous growth in real estate auction sales over the past five years, auctioneers are witnessing more challenges in today's housing market," said NAA president Tommy Williams, CAI. "Auctions set the market value and sellers are uneasy with the realization that their property is only worth what the consumer is willing to pay and are concerned about a loss in their properties market value. In addition to seller apprehension, today's buyers are concerned with purchasing assets in an uncertain economy and do not see eye-to-eye with sellers on the true market value of their property."  
 
Every January, the National Auctioneers Association unveils its annual end-of-the-year report to the public. This report provides and overview of the industry, as well as highlights growth within sectors of the auction industry (i.e. real estate, charity, art, antiques and collectibles, etc.). To view a copy of the past three years of reports visit www.auctioneers.org and click on Auction Industry Stats.

In today's slow moving real estate market are you having trouble getting your home noticed?

Real estate auctions can deliver the results you need.  In fact, a real estate auction can put cash on the table in 60 days from the very first day you sign the listing agreement with the auctioneer. 

The first 30 days are spent marketing the property and the sale is held near the 30th day.  Closing is set for 30 days after the sale and often occurs before that time so you can expect to have your home sold in 45-60 days. 

The first argument is likely going to be "well I won't be able to get what I want for it"  You may be absolutely right and you might be wrong.  Sometimes real estate sells at auction for more than the seller wanted to ask for it through an agent.  In some cases you'll never get what you want, have to have or need to get.  In some cases its just not possible.  I'm well aware, as are the banks that a huge portion of Americans now have negative equity in their homes today.  If you are facing foreclosure its possible your bank will work with you to "short sell" your home, in which case they allow you to sell your home for less than you owe against it in satisfaction of your debt to them.  This is not always the case but in todays market short sales are very common, and often a cheaper option for the bank than actually going through with foreclosure.   An Auctioneer can work with your bank and help sort out the details and request the short sale if you sign an authorization for them to discuss the situation with your representative.

A home is only worth what someone is willing to pay for it and those numbers fluctuate constantly.  If a buyer can buy a home that fits them just as well or better for a cheaper or comparable price it affects the value of your home in their mind.  Buyers will compare all of their options and establish a value for your home, value is what they are willing to pay.  They are willing to buy your home, at a certain price, everybody is willing to buy your home at a price that is right to them.  The driving force in today's home sales is how much a buyer will pay for the home, not what the seller wants for it.  If the seller wants to much why would the buyer not just walk across the street, down the block or across town and buy another home that is more appropriately priced?

How do you know if you are ready for an auction?

I believe a real estate auction should be your first choice each time for the sale of your real estate.  It guarantees you do not leave even one dollar on the table, it is much easier than listing your home, and it establishes the absolute highest dollar someone is willing to pay for your property.  Here are some signs that its absolutely time for an auction.

You've had your home listed with a Realtor for more than 180 days.

You've had your home listed with a Realtor for 90 days and had fewer than 3 showings.

You are tired of getting the house in order for showings to get no offer.

Feedback from lookers always revolves around price, location or condition.

You are facing foreclosure. (Call quickly)

You are being relocated, or have another reason you must sell quickly.

You are an absentee landowner and do not want to commit 6 months or more to selling property.

You are settling an estate

You have many other items to sell along with the real estate such as machinery, tools or household items.

At Smith Auction Marketing Company we work with Realtors, and while I understand they want to hang onto you as long as possible to recoup the money they have into marketing your property, they do have the option of working with an auctioneer and splitting commission no differen than they would with another real estate agent.  If you are sitting at home reading this I can only assume you are motivated to get your home sold, recommend to your agent the possibility of partnering with an auctioneer to sell your home. 

For you to be successful with an auction you have to be ready, willing and able to sell your home.  This includes a realistic view of what you will get for your home and understanding the highest bidder may be below what you want for the home.  You may get what you want and more if your home is marketed correctly, either way IT WILL get an offer on the table that you can work with.

What is the alternative?  Languishing in the MLS for another 6 months, 12 months, 18 months? They are out there, homes that have been listed for over 18 months.  There are more of them than ever now. When I first was licensed as a real estate agent I was told that I was to call all my sellers each week, and even if there was no activity on their listing I was to tell them we had a few calls on it but the callers thought the price was a little high.  This was supposed to prompt clients to reduce their price and make the listing easier to sell.  I value my integrity and have always felt honesty was a better policy, after all its my job to give good honest advice. 

Do yourself a favor and call real estate auctioneer today, get your home sold in 60 days.