What Is the Auction Market?
When it comes time to sell your property, you likely would prefer to stick with the process you know. The traditional market is a popular choice and something most sellers understand to some degree, but it’s not your only option. In fact, sometimes it’s not even the best option if you want to get a fair market price for what you’re selling.
Auctions are often a great alternative to selling on the traditional market. We know it might seem intimidating to choose a process you’re not familiar with, so we’ve created this blog to help you understand the main points of the auction market, such as how auctions work, how they’re different from traditional sales, and why you should work with a modern, full service auction company.
How the Auction Process Works
The “auction market” process stems from financial markets like the New York Stock Exchange. Business people and investors buy and sell stocks through a competitive bidding process or use intermediaries like dealer markets or market makers. The same general principles apply to property auctions.
In the modern auction market, you’re listing your property for sale so that multiple potential buyers can compete to purchase it. Although most auctions work on the premise that the highest bid wins, this isn’t always the case. Some types of auctions simply require the seller and buyer coming to an agreement on an acceptable price.
Similar to how you’d hire a real estate agent to handle the sale of your property on the traditional market, with an auction, you’ll need to partner with an auction company. Their representatives will act as the middleman in your sale—managing the listing, taking bids, and helping to facilitate the closing process.
How Auction is Different from Traditional Sales
Now that you know generally how the auction process works, you can see that, in some ways, it’s similar to the traditional market. You’ll work with professionals to negotiate with buyers in hopes of getting the best price. But there are a few ways the auction market is different, which often works in the seller’s favor.
Sense of Urgency
Auctions create a sense of urgency among buyers because they know the competition is high and the time to bid is limited. This means you can often secure a sale much quicker than on the traditional market, and often at the highest price possible. Because auctions are driven by market demand and there are no direct negotiations, you’re more likely to have someone bid the true value of your property than try to cut a deal that might leave money on the table.
When you sell on the traditional market, there’s no way to know how long you’ll have to wait for the right buyer. And when someone does come along, there’s no guarantee that their offer price will match your asking price.
In an auction, your representative will help with the valuation of your property and determining a list price. Once your property is listed, you’ll set an auction date too. This date marks when the auction closes and you’ll get to review bids and choose which to accept. It can greatly shorten the sales process and reduce the stress of wondering if the right buyer will ever come along.
Another risk of selling the traditional way is that buyers can back out at almost any time in the process. In auctions, however, buyers are required to meet certain qualifications set by the auction company and agree to the terms and conditions of the auction. This means there’s significantly less chance of a sale falling through or a buyer backing out at the last minute.
You’re In Control
Finally, as the seller in an auction, you’re always in control. You don’t have to accept the lowest price because it’s your only offer or wait until the market turns back in your favor. With an auction, you can list your property based on the current price of similar listings and take or leave bids as you see fit. No need to negotiate with buyers and try to come to an agreement. Set your price and let the buyers come to you.
How Wiregrass Auction Group Can Help You
As a modern, full-service, qualified auction company, we pride ourselves on being a great auction partner for our clients. We have a team of experienced real estate agents and auctioneers who can help you get the best price for your property, land, farm, or home.
We use online auctions to attract the most buyers so you have a better chance of pulling in high-value bids. We also manage the entire auction process, from preparing your property to listing it online to managing the sale and closing process.
Let the auction market work in your favor. Call us today to see how we can help you sell your land or home at auction.