Real Estate Auctions are attracting a growing number of buyers and sellers. Some 12 percent of all real estate sold last year was sold at auction. Analysts expect that figure to double in five years. Auctions are not to be considered as a sale of last resort. It is highly possible that a bidding war will drive up the selling price to the typical marketing method of listing with a Real Estate Agent. Agents do a fine job of placing a sign on the property, exposing the property with the multiple listing service and waiting for a buyer. Speed is the greatest advantage of an auction. The seller picks the date of the auction and the sale is over fast, thereby, eliminating the need of spending money on interest, insurance and maintenance. If you are relocating and need to move your property in a timely manner so you can reinvest quickly, close to your new job, or you just don’t want to wait for the buyer to decide when they are ready to buy, an auction may be for you. The auction is productive by dealing with ready willing an able to buy prospects and eliminating "tire kickers."

Picking a Real Estate Auctioneer is a simple process of interviewing one or more Auctioneers. Find one with experience in the type of property you have for sale. Ask for references and auction brochures of completed successful sales. You may also want to check with the Texas Department of Licensing and Regulation in Austin to see if there are any disputed inquiries against the Auctioneer. All Texas Auctioneers must be licensed Real Estate Brokers as well as licensed Auctioneers to sell Real Estate at auction.

The commission rate charged by Auctioneers are negotiable. Some charge the Seller usually about 6 percent while others charge a Buyer’s Premium from 6 to 10 percent. The Buyer’s Premium is probably the most popular and acceptable method today. This gives the seller the best net results. The seller will receive the highest bid, less of course, the normal closing cost that are required to be paid in any normal real estate closing.

You may choose one of three types of auctions: Absolute, Minimum Bid, or with Seller Confirmation.

Absolute Auctions attract the highest number of serious potential buyers. They attend the auction as ready willing and able buyers. Potentially this method produces the best bottom line results in an auction properly advertised. Even an undesirable property can be sold. Some risk can be expected but normally this is minimal. However, this method it is not for the seller with a weak nervous disposition.

The Minimum Bid method allows the seller to set an advertised floor price. Any bid equal to or exceeding the floor price will cause the property to sell.

Auction’s with Owners Confirmation allows the seller to accept or reject the highest bid when all bids are in. This type of auction typically attracts the least amount of interest in buyers.

Promoting or Marketing the property is an essential part of selling Real Estate. The Auctioneer will spend anywhere from 4 to 6 weeks promoting the auction by way of advertising in newspapers, brochures to targeted mailings to people who have answered ads previously or may have attended another auction. Signs on the property attract a lot of attention with big bold AUCTION lettering. Other Real Estate Agents are a good contact as they may have a potential client interested in that type property.

An open house inspection period is important for any Real Estate sale. This allows the bidders an opportunity to become acquainted with the property and the auction company. All details of the property should be available for the potential bidders at that time. Every question about the property should be answered so the only question left for the bidder would be how much will he or she bid in order to get the property.

A reputable Auction company will explain to you, as a potential seller of Real Estate, where marketing will be done and to what extent. The Auctioneer will normally pay all of the expenses of the auction when the Absolute Auction method is used. Unfortunately the Seller will have to pay the advertising bill in advance when Minimum Bid or Seller’s Confirmation is used. On some occasions the Seller will be asked to pay for Promoting or Marketing the property using the Absolute Auction Method.

On Auction day the potential bidders register with the auction company. Bidders must show proof of ability to purchase the property by way of a letter of credit, or where financial arrangements have been made with a lending institution. Certified funds or a letter of guarantee, with a company or personal check, for a specific amount is required as an Escrow Deposit. The deposit is used toward the purchase price and is non refundable should the buyer change their mind or fail to close for any reason. The balance of the purchase price is due upon closing at a pre-determined date, usually within 30 days.

The Auction process will only take a few minutes, sometimes less than 15 minutes for a single property. When a number of properties are sold at any one given date and time it may take up to 5 minutes for each property to sell.

Don Flusche Real Estate Broker & Auctioneer

Flusche Auction Co., Inc.

PO Box 278

Muenster, Texas 76252

940-759-4440 Phone

940-759-4288 FAX