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Auction Process
You are here:   Real Estate Sales and Auctions  »  Real Estate Services  »  Auction Process

The Auction Advantage  

Why should you consider the auction marketing method? The following are a few documented advantages commonly cited by those in the industry:

For Sellers:
 

         Buyers come prepared to buy your property. The purchase is not contingent on financing.  

  

         The auction creates a sense of urgency and brings interested parties to a point of decision. 

  

         Auctions create maximum exposure for the property. Auctions are a concentrated effort, so the exposure and efforts are more intense and visible.  

  

         The seller avoids high carrying and holding costs. 

  

         Auctions create and increase buyer competition for property resulting in higher prices.  

  

         The seller can set a specific date, time, and location for sale of the property. 

  

         Seller controls all of the sale conditions and terms. 

  

For Buyers:  

         Buyers know the seller is committed to sell. 

  

         The buyer knows he is getting the property at a fair market price set by public bidding. 

  

         The buyer has full control of what he wants to bid to own the property. 

  

         Auctions reduce the potential negotiating time for the buyer.  

  

Auction Formats for Real Estate  

  

  • Public Auctions
    The public auction process is a tried and true method of selling real estate in the United States. At Farmers National Company, we know that the auction method has the ability to get you top dollar while you remain in full control of the selling conditions and terms. It also offers you a chance to sell your property in a reasonable period of time. We work with you to choose how the actual auction will be conducted. There are several options to consider:

  

  • Undisclosed Reserve Auction
    Through a reserve auction, the public is placed on notice that the auction is being conducted with a reserve price. You, as the seller, have the right to accept or reject the highest bid made. You agree on the reserve price with Farmers National Company in advance of the auction, but it is undisclosed to the public. This is our most common type of auction and brings you, the seller, several advantages.

 

  • Oral and Sealed Bid Sales
    When the circumstances surrounding a sale or local market conditions preclude the use of a public auction, our agents can offer several special auction methods. One is the sealed bid auction in which bidders are required to submit their highest and best offer in writing. Occasionally, in certain situations, qualified bidders are then invited to extend their offers in a controlled competitive bidding setting. Ultimately, your Farmers National Company agent will utilize their knowledge of the land market to recommend the most effective auction method that will give you the best sale price for your property.

  

  • Multi-Tract Auctions

Farmers National Company is one of the pioneers in offering farms and ranches at public auction using a multi-tract system. This method involves dividing larger properties into multiple bidding units and then allowing potential purchasers to submit bids on individual tracts, combinations of tracts, and finally the whole property.  

 

All bids are entered into our tracking system and displayed for the public to view throughout the open competitive bidding process. Offering property under the multi-tract system increases the number of buyers who can afford to purchase, creating excitement and demand. It gives all bidders an equal chance to compete.  

 

Bidding is more flexible and can result in more bids and increased values. The very fact of dividing a property can transform it from one with limited sale potential to a highly competitive auction property that will bring a higher sale price. 

 

  • Online Auctions
    For sales that have special circumstances and special needs, Farmers National Company can offer a web based, online only auction service. Competitive bidding takes place through a secure internet site.

  

The Auction Process  

The following describes the different components of the auction process for a property: 

  

  • Marketing
    An aggressive marketing program is critical to an auction's success. Massive interest must be created in the property. The advertising budget is set according to specific properties and the type of market that needs to be reached. The budget is then broken down into various forms of advertising that will best reach the market for the individual property. Direct mail, newspapers, trade journals, radio, property signs, telephone solicitation, property brochures, and an extensive web presence.

    Depending upon the type of property, location, value, and the size of the market area, the advertising budget is set to maximize exposure to the potential buyers.

    The auction staff will devote many days of prospecting the market to identify potential buyers and discuss their interest in the property to be offered.

  

  • Time Frame
    The allowed time for a real estate auction varies depending on the type of property, but generally it is 60 to 90 days from the initial planning stage to closing. The auction itself may take from just a few minutes for single property to several hours for a multi-parcel auction.

  

  • Terms of an Auction
    The seller sets the terms and conditions of the auction with advice of the agent and auctioneer. The terms must be in balance...keeping in mind that there are two parties in the transaction. There should be no contingency clauses on auction day. All possible concerns and questions of the buyers should have been addressed prior to the sale day. Usual terms are that the high bidder(s) deposits with the auctioneer an advertised earnest money deposit (% of the purchase price) and enters into a pre-approved contract immediately following the auction. The balance is paid in 30-60 days with delivery of good title from the seller. Items of consideration in sales terms:
    • Percent Down
    • Leases
    • Reservation of Minerals
    • Property Information to be Provided
    • Legal Descriptions
    • Closing Date to be Advertised
    • Abstract vs. Title Insurance
    • Real Estate Taxes
    • Maps
    • Possession
    • Survey

  

Additional Auction Information  

arrow-rtView Multi-parcel Auction Video  

arrow-rtAuction Questions to Consider  

arrow-rtFNC Auction Calendar  

arrow-rtFNC Auction Results  

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