Real Estate Myth #8

Real Estate Myth #8

Written by Leigh Martinuzzi

Auctions are expensive and risky

Continuing on from Myth #7 is the misconception that auctions are expensive and even risky. The fact of the matter is that yes, to sell by auction incurs additional fees to the seller. These include the investment of an experienced auctioneer and usually an increased marketing budget.

When you sell any property, it is advisable to invest as much as you are comfortable with in marketing your home. The key to a successful sale is to create strong demand for your property. Because we will never know where your eventual buyer might come from the more reach you can afford the better your chances are of creating demand and healthy competition. The goal of an auction is to have buyers competing against each other therefore the more demand you can create the better. It’s in your best interest to increase your marketing budget if you wish to sell by auction.

Whether you choose to sell by auction or private treaty, an investment in marketing is an expense but consider it much like insurance. You may never need to make a claim but is better to have it than be without it. If you do everything you can, within your realm, you can remain confident that you’ve done all that you could to find buyers for your property. As for the auctioneer fee, that will vary depending on who you use. As you would in selecting your agent, do your homework.

To bust this myth, it is fair to say that auctions can cost more, but not by ridiculous amounts and usually. Marketing can be adjusted to suit any sellers budget. What is important however is the process. An auction strategy is designed to create competition and drive the eventual sale price over everyday market value. This could be in the tens of thousands of dollars. So, wouldn’t a slight increase in expense for a greater return be worth the risk? If you could turn $1000 into an additional $50,000 most of us would jump on that any day of the week.