Real estate professionals who want to work in property auctions need to adopt a new way of thinking, says Ted Cucuro, a senior broker associate with Sheldon Good & Co., Chicago. “We do everything in reverse,” Cucuro told attendees of an educational session at the 2007 REALTORS® Conference & Expo in Las Vegas.
For example, sellers in auctions establish contingencies, such as which repairs they will be willing to make, before the sale.
And in a traditional sale, the date of sale is often the last thing agreed upon. But in an auction, the date of sale is set first and all marketing, inspections, and other steps necessary for the sale come later.
If the schedule of an auction seems strange, that doesn’t mean auctions are something real estate professionals should shy away from. Rather, auctions provide another option to offer clients and another way to realize additional income. And they represent a growth market.
The National Auctioneers Association, an industry trade group, projects live auction revenues will climb to $264.8 billion nationally this year, a $7.6 billion increase compared with 2006, Cucuro says. Over the period 2003-2006, residential real estate auctions grew the fastest, 39.2 percent, of all categories tracked by the NAA.
Seller agent commissions paid by auction houses normally start as a flat fee but can vary and can be negotiated based on such factors as the amount of business a practitioner refers and the amount of the practitioner’s involvement in the auction process.
Real estate professionals interested in becoming involved in the auction process as seller agents should attend auctions to see how they function and work at building relationships with auction houses, Cucuro says.
They also need to learn how to evaluate which properties and which sellers make the best candidates for auctions. Evaluating candidates for auctions starts with looking at potential sellers and their reasons for wanting to pursue an auction. Next comes looking at the property and the overall market to decide whether an auction is the best way to sell the property.
The 2007 REALTORS® Conference & Expo is Nov. 13-16 at the Venetian Resort Hotel & Casino in Las Vegas. The meeting, with some 30,000 attendees, features more than 200 conference sessions and 744 exhibitors.