There was a time not to long ago that the only people who needed to know how to auction a house were people who were making what was considered a last ditched attempt to unload a financially distressed property. That’s not the case anymore. Auctions are increasingly being used as another legitimate sales tool at the hands of real estate agents and owners to price and move their listings. If you choose to go the auction route, consider some of the following tips.
Check the auctioneer’s track record and training. Make sure that he is a licensed real estate agent in your state, and that he is allowed to sell at auction in your state as well. If you can, try and deal with an auctioneer who’s a member of the National Auctioneers Association, an organizations with members guided by a professional code of ethics.
Make sure that you are completely comfortable with the auctioneer. He should answer all of your answer clearly, and allow you to walk away feeling comfortable that you’ve gone with the right person. Attend one of his auctions to gauge turnout and buyer response to his auctioning style. Ensure that you are comfortable with his marketing strategy regarding advertising the auction, and get everything in writing. Sign off on the auctioneer’s plan to stage your home for showings. Find out how he's going to ensure bidder attendance.
Find out what your home is worth. Look at comparables in the area, and hire a reputable appraiser to do a valuation.
Get a list of auction fees and related costs upfront so that you know how much money the auction is going to cost you. Find out if your auction house charges only a buyer’s fee, or both a buyer and a seller’s fee. Find out if the auctioneer gets paid whether the house sells or not. Don’t be afraid to negotiate.
Find out if you have the option of changing your mind about the sale of the home, either prior to the auction, or once you’ve accepted a bid. Find out when that window is.
Set a reserve bid, meaning the lowest price you’ll accept for a sale. If you go with an absolute auction, the house will go to the highest bidder, regardless of price.