Commercial Auctions FAQ
Q. What is commercial real estate?
A. Commercial real estate includes retail, office, medical, banks, manufacturing, warehouses, libraries, storage, and other business properties.
Q. What are the benefits of a real estate auction?
A. The Commercial Real Estate Auction is beneficial for everyone involved. The seller liquidates properties efficiently, saving long-term costs such as real estate and business taxes and maintenance, as well as interest. The buyer has the opportunity to make a smart investment, because properties purchased through competitive bidding are typically purchased at fair market value.
Since commercial auctions occur in an open forum, serious buyers and sellers have the opportunity to see the property’s true value emerge through the bidding process. Fair market price prevails for seller and buyer in a commercial auction.
Q. Are all properties suitable for auction?
A. Though not every commercial property is suitable for sale by auction, most are. Commercial property including convenience stores, medical offices, restaurants and office buildings are successfully sold at auction. Most sound commercial real estate parcels that can be offered for sale in the real estate market do very well at auction.
Successful auction marketing companies make it a point to know the market, evaluate the development or property, and offer a complete written proposal detailing recommendations, actions, and costs.
Q. Is it possible to market property if it doesn’t sell at commercial auction?
A. Yes, however the commercial auction generates a stimulated market atmosphere that may not be duplicated after the auction date has passed. It is best to take advantage of the heightened market excitement that the auction and marketing strategies have produced. There are times, though, when a buyer wishing to buy the property is not comfortable with the auction environment, and makes an offer to buy after the auction. In other cases, offers to buy the property are made prior to the auction date, and accepted. It is best not to pass up the opportunity to accept the best and highest bid, which will be made at the auction.
Q. Can I be sure of getting a fair price?
A. The true measure of value in commercial real estate is what the highest bidder offers for it. An appraisal represents an informed opinion, but is not an offer to buy. The actual value of real estate, at any particular time, is what it will bring under competitive bidding in a commercial auction.
Q. Is it true that commercial real estate auctions are often thought of as a “Going out of Business Sale” for someone who cannot make a good profit or meet their payments?
A. Though most auctions, such as fine art or antique car auctions, have a positive image, at times commercial real estate auctions has suffered a poor image. There are, however, many reasons for a seller to use a commercial auction to sell property including moving to a new location, expansion, lease changes, retirement, and zoning.
Q. What factors determine the success of a commercial real estate auction?
A. The primary factor is the desirability of the property, including location, quality, and condition of the surrounding properties. The effectiveness of the promotion and marketing plan is also a key factor. Realistic expectations are important to a successful commercial auction. In addition to these factors, it is important to select the type of auction that best suits the seller’s needs, conduct the auction through a reputable auction professional, follow through to closing, and undertake the “duly-diligent” property research, so that buyers are informed. Finally, price is also an important factor.
Q. Is it better to auction a running business or the property alone?
A. In most circumstances it is better to auction a running business if that business has a history of being successful. The buyer is able to recognize an immediate return on his investment. However the location and condition of the property are the most important aspects of the sell commercial real estate, whether the business is currently operating or not.
Q. How is commercial real estate advertised for auction?
A. Kurtz Auction & Realty Company knows from our proven expertise which media mix is best for your commercial auction. How this is accomplished can vary depending on the value and variety of property to be auctioned. An essential element for a successful auction is a highly aggressive, targeted publicity program. A powerful promotion and advertising campaign precedes every commercial real estate auction, with the advertising budget customized to fit the specific assets and targeted markets, which may include:
- A detailed brochure mailed to our extensive lists of prospects specifically interested in type of commercial property being auctioned
- Early email alerts about the auction and featured property
- Direct mail, print ads posted in public and neighboring areas, and signs placed on the property
- Notices in newspapers, journals, trade papers and other local, regional, national, or global publications
- Radio, local television or cable advertising
- Property specific websites and blogs, including our own website, where we drive traffic to your auction using search listings on Google, Yahoo, MSN, AOL, auctioneers.org, Loopnet, AuctionZip, Cityfeet and more
- Last minute phone reminders made to prospects
This aggressive advertising campaign attracts buyers who will come and bid competitively on your property, thereby bringing the true, fair market price to you!
Q. How long does it take to market the commercial property, hold the auction and complete the sale?
A. Depending upon the type of commercial real estate auctioned, generally, the process takes 45 to 90 days from listing to closing. The auction event may take anywhere from twenty minutes to an hour, depending on the potential bidders and the property being sold.
The Kurtz Auction experts look forward to serving you! We invite you to view our featured listings or contact us to sell property with Kurtz Auction locally and nationwide. To speak with a Kurtz auction specialist in your area, find your nearest Kurtz location.