Home Auctions 101
Home auctions primarily involve the sale of property to the highest bidder. With most auctions being open to the public, broad-based bidding occurs. Often, residential property sells at unexpectedly high prices. This is due in part to the fact that buyers deciding what they are willing to pay, and creating their market, as opposed to sellers alone setting the price.
In the home auction process, an auctioneer moderates the negotiation between prospective buyers and the seller. The only term of negotiation is the price. The auctioneer makes the determination of when all bids are complete, at which point the agreement becomes a contract, and the sale is complete.
History of Auctions
Auctions have around for centuries, having had a place in business and society throughout history.
- The word "auction" comes from the Latin word "auctus," meaning "increasing or gradual increase." Today, an auction is defined as a public sale of property to the highest bidder.
- The earliest licensing of auctioneer is said to have happened in Rome.
- A frequent auction buyer, George Washington purchased items for his Mt. Vernon home at auction.
While the auction concept, in some form, dates back as early as 500 B.C., real estate auctions in America are first recorded to have taken place in the 1600’s, growing in frequency following the Revolutionary War. Since then, auctions have gained popularity due to the quick and efficient manner in which they bring about sales.
Home Auctions are Growing
According to the National Auctioneers Association, auctioneering is a growing industry. Studies show that over half of the U.S. population has been to a live auction.
Real estate is the fastest growing segment of the auction industry. According to statistics reported by the National Auctioneers Association (NAA), increasing numbers of sellers are relying on auctions to sell property. Despite the continuing challenges faced by the housing industry, the real estate auction market remains strong. Within the real estate segment (e.g. residential, land/agricultural, commercial/industrial), residential real estate farm auctions witnessed the largest growth, increasing 5.3% from 2006.
Home Auction Myths
Home auctions are not a last option! They are an effective choice for home sellers. There is a misconception that auctions occur only in the event of death or repossession of property. In fact, sellers choose to sell via auctions for a myriad of reasons.
The need for auction buyer and sellers to be experienced in order to be successful is another myth. The Kurtz Auctions staff is there to facilitate the entire process, assisting buyers and sellers with understanding the various aspects of the auction process. For example, the auction chant may be confusing and even intimidating to those new to the auction process. We recommend listening carefully to the caller, and getting accustomed to his method, before bidding.
Types of Home Auctions
Basically, there are two types of Home auctions:
- An Absolute Auction
- An auction that has no reserve.
- Regardless of the price, property is sold to the highest bidder.
- Buyer participation and anticipation are elevated because a sale is guaranteed.
- Greatest marketplace response is generated.
- Most frequently used method of auction.
- A Reserve Auction
- An auction contingent on confirmation
- High bid is reduced, in response to an offer rather than a sale. A seller retains the right to reject or accept a high bid, and a minimum is not published. Unless otherwise specified, by law, all auctions default to Reserve auctions.
Kurtz Auction has a 99% sale success rate, so regardless of the auction type, you’ll have great results.
Home Auction Methods
While Live Auction has been the traditional method, advances in technology have added innovative nuances to the auction process. Bidders may submit private bids through a Sealed Bid method. Prospective buyers submit private bids, either in writing or by phone, and the bids are opened at designated time or place. Online bidding, such as that done through eBay is also prevalent today.
Kurtz Auction has expertise and experience in all available auction methods.
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.