What type of property owners should consider using the auction method?
Private and Corporate Property Owners, Living Trust and Decedents Estates, Federal and State Courts, Municipalities, School Boards, Prominent Families, Financial Institutions, Fiduciaries, Trustees, and Partnership Dissolution's.
Is the auction method ever used as a first selling method?
Yes - for quality properties that have never been on the market and many that are clear of mortgage.
Should land that is prime for a builder's tract be sold at auction, without subdivision contingencies, as opposed to selling it privately to a builder, subject to the normal one to two year land subdivision process?
Yes. It should be seriously considered.
Example: A sitting judge concerned about the liquidation of his former client's estate advised fiduciaries of the estate that he preferred that the decedent's important land property be sold by auction. His judgment proved correct, for the property sold for all cash, no conditions, for a price that was 50% higher than the estate's current market appraised value and to an out-of-state builder. In hindsight, had the property been sold using the conventional method with builders' contingencies, it would have taken seven years for the property to go to settlement and a substantial economic loss to the estate.
Can a bankruptcy auction be absolute and do the creditors usually end up as the high bidder?
Today most bankruptcy real estate auctions are absolute, allowing for the creditors to credit bid. The purpose of having a professional auction firm perform a high profile marketing and promotion campaign is to develop a third party who will pay more than the credit bidder.
Which is more effective: open public auction bidding or sealed bid auction?
Although both methods are effective, most real estate sold by the auction method is sold via the open public bidding forum. The open forum allows the bidding to become more competitive and it provides an element of theater and emotions. While sealed bid auction method is used for a variety of transactions, it is sometimes replaced by the more effective open public auction.
What are the costs associated with selling real estate by the auction marketing method?
The costs of having a real estate auction are the direct expenses of advertising and promotion, and the overhead and profit.