Whether your looking to sell your home, vehicle or excess inventory
from your business, you should consider selling your property at
an auction. Auctions offer a fast-paced way in determining what
price the market bring for your property. With the combination
of solid pre-sale marketing and the auctioneer's ear-catching chant,
you could have enthusiastic, attentive buyers competing to purchase
your property. Often, items sell for far more than their estimated
value
In comparison, placing an ad in the classified or posting a “For
Sale By Owner” sign may garner only a lukewarm response or “tire
kickers” just looking. It may take months before you finally
sell your property, and even then you may have to accept a price
much lower than you had hoped.
But holding an auction takes a bit more time than simply contacting
an auctioneer and collecting the cash after the sale. For you,
it means determining if your property is right for auction and
finding and contracting with an auctioneer that meets your needs.
For the auctioneer, it means marketing your merchandise, preparing
and conducting the sale, and tallying and dividing the proceeds
from that sale. What follows is a brief look at the steps you need
to take to determine which auctioneer best meets your needs.
If your property is right for auction, then you're ready to begin
looking for an auctioneer. The easiest way to find an auctioneer in Massachusetts
is to search the Massachusetts Auctioneers Association's on-line database or contact the MAA for a MAA Members Directory Book.
You can also find auctioneers by looking in the Yellow Pages under “auctioneer.” Or
you can locate an auctioneer by looking for auction ads in the
newspaper.
Finding an auctioneer is easy. Hiring the right auctioneer takes
a little more effort. You will want to weigh several factors carefully
before signing a contract. Price shouldn't be the only determining
factor in making your decision. You should also consider:
- Auctioneer
Specialty. Many auctioneers specialize in only a few types
of auctions. They will best know the market; the value of
your property and how to attract the buyers most interested
in your property.
- Experience. Auctioneers can conduct anywhere from a few dozen
or over 100 auctions in a year. Seasoned auctioneers know the
market and know how to get the best price for your property.
- Referrals. Auctioneers have plenty of success stories to share.
But don't just take their word for it. Ask former clients
for their thoughts on their sales.
- Licensing. Many states require auctioneers meet professional
licensing requirements. Municipalities may also require
auctioneers have
permits or licenses.
- Professional Affiliation. Members of the National Auctioneers
Association and state auctioneer associations keep
abreast of their respective
specialties, regulatory requirements and changes in
your market. More importantly, NAA members are governed by a
Code of Ethics,
which ensures professionalism and protects both you
and the buyer.
- Reputation. While less tangible, an auctioneer's reputation
is crucial to the success of an auction. This is
a blend of experience
and character. An auctioneer who is trusted and respected
in their community will more likely attract a devoted
group of
buyers willing
to attend and bid at their auction. Talk to former
clients and people who attend auctions frequently.
If in doubt, ask questions. What type of auction is best
for my property? What types of services do you offer?
Where will
the auction
be held? How soon will I receive the proceeds from
the sale? Learn what you can now to avoid any misunderstandings
later.
Be prepared. The auctioneer will have some questions for you as
well. How soon must your property be sold? Why are you selling
now? Have you tried selling before through other methods? While
you're trying to choose an auctioneer, the auctioneer will be determining
if they can meet your needs and get the best price for your property.
Once you've made your choice in an auctioneer and determined the
services you want, you'll cement the partnership by signing a contract.
The contract will spell out your responsibilities, the responsibilities
of the auctioneer, commissions, expenses you'll pay and when you'll
receive the proceeds from the sale. Read the contract carefully
and make sure you know the details of the contract before you sign.
If you're unsure before you sign, ask questions.
Auctioneers boast they can sell just about anything for a tidy
profit. After researching your property, an experienced auctioneer
can determine its value, but it doesn't hurt to have your own
ideas about your property's value.
So how much is your property worth? It depends upon the market
for your particular piece of property. Some commodities, like real
estate, depend largely upon the geographical area and sale prices
for similar properties. Other, more specialized commodities, such
as manufacturing equipment or heavy equipment, will attract smaller
groups of buyers across a much larger area.
It also depends upon the condition of your property. Knowing the
age of your property, the manufacturer, the types and extent of
repairs and keeping records of regular maintenance may help determine
value.
It doesn't hurt to conduct your own research by visiting stores
and consignment shops, reading classified ads or by checking web
sites for property similar to yours.
While you are conducting your research, you must make sure that
you own the property. This is particularly true of real estate.
Without a deed or title to your property, it will be very difficult
to sell your property at auction.
Conducting an auction requires far more than placing items on the
auction block and collecting money. Before you finalize an agreement
with an auctioneer, what can you expect before and on auction
day? Before, during and after the sale, your auctioneer will
be juggling many duties:
Marketing. Your auctioneer will need to generate interest in your
auction, and the best way to get the word out is advertising. Depending
on what you're trying to sell, the auctioneer could use a blend
of newspaper ads, radio spots, ads in newsletters and specialty
magazines, custom brochures, direct mail pieces and sales bills.
The Internet now plays a significant role in marketing upcoming
auctions. Many auctioneers post details about upcoming auctions
on their web sites, or they could use auction lists on other auction
sites, such as the Massachusetts or National Auctioneers Association's
Find an Auction function.
Finally, some sophisticated auctioneers develop email lists of
registered buyers who are interested in specific items that are
offered for auction. They may use that list to generate interest
in your auction.
Type of sale. There's more than one type of auction, but which
one is best for your property?
Absolute auctions set no minimum amount for a piece of property,
despite its appraised value. For example, if a car is appraised
at $600 but only garners a high bid of $550, the high bidder walks
away with a bargain. Likewise if the car sells for $650 or more,
you benefit from the greatest advantage of an auction—the
market determines the value.
Reserve auctions allow you to set a minimum amount you're willing
to accept for your property. That amount will not be disclosed
prior to or during the auction. You have the right to accept or
reject any bids at a reserve auction, and you can remove the property
from consideration before the auction is completed.
There are a few other details your auctioneer will handle, such
as absentee bids or proxy bidding. Also, some auctioneers use the
Internet to accept bids, through email prior to or during the auction,
or by streaming video with the ability to accept bids in real time.
Preparing items for sale. After inspecting and appraising your
property, your auctioneer may suggest minor repairs or maintenance
be made to increase the value of your property. For example, if
you're selling a house at auction, painting the exterior or cleaning
the lawn may make it more saleable. It could be your responsibility
to complete these tasks or the auctioneer may do them on your behalf.
Sale Day. Your auctioneer will be plan and execute your auction
from start to finish. This includes:
- Setting up and cleaning up the facility
- Organizing and displaying
your property: The auctioneer and their staff will catalog
your property, tag it with lot numbers and
organize it for display. In some cases, such as real estate
auctions, they will allow buyers to look at the property a
week in advance.
At the very least, buyers can view the property on the
day of the auction.
- Answering questions about your property, terms of
the auction and the auction.
- Registering bidders. This includes
taking basic information from individuals wanting to bid
on your property: name, address,
phone number and drivers license number.
- Calling bids
- Collecting money from winning bidders
Money collected at the day
of the auction is usually deposited into an escrow account, a
third-party bank account that
holds the proceeds until the auctioneer can tally receipts
and expenses.
Before you collect your share of the sale, the auctioneer's commission
and expenses must be deducted. Auctioneers are usually paid on
commission, a percentage of the gross proceeds from the sale.
Some auctioneers are turning to charging a buyer's premium to
collect their fee. A buyer's premium is a percentage added on
to the final price of the item. You'll need to discuss how your
auctioneer will be compensated before you contract with them
Beyond the auctioneer's commission, your auctioneer will have
other expenses they've taken on your behalf. For example, if they've
placed an classified ad in the local newspaper for your auction,
you can expect to pay for that ad. Or they may have rentals, catering,
set up and auctioneer staff. Those charges may also be deducted
from the gross proceeds from the sale. Or they may charge a buyer's
premium and use that to pay the expenses.
Avoid unpleasant surprises by asking the auctioneer about their
commission, what services they'll provide and what additional expenses
might be involved in the sale. Some auctioneers will provide a
budget or a cost estimate for your sale.
Auctions are an excellent way to sell a range of property, from
real estate, to unwanted business equipment to collectibles. Finding
an auctioneer who specializes in your property, and who has the
right blend of experience and training can help make your sale
more rewarding.
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