In part 1 of this blog post we discussed how real estate auctions in Arizona are no longer viewed as distress sales as well as provided information about entering real estate auctions. This auction will continue to provide information about entering the real estate auction field.

The investment required to enter the real estate auction field varies on whether you are an independent or partnered auctioneer. Either way expect to put some capital into marketing your services to home sellers or real estate firms. The advertising expenses of the auction are typically an up-front expense to the seller, and often these costs range from $1,500 to $6,000 which can be recovered for them in a buyer’s premium.

The actual bid calling is only ten percent of the work to be performed with the auction. You will need to work with the seller to determine the method of auction. More buyers are attracted to the home sale if it is an absolute auction which can be risky but can often generate a higher than expected sale’s price. Both the minimum bid and reserve auction are safer for the seller but attract fewer bidders. Once the sales terms are decided upon, you will need to execute a contract, hold an open house(s), help buyers obtain financing, promote and advertise, and assist in the home closing.

Even though the process of holding a real estate auction in Arizona can seem overwhelming at first, the process is not much different from a general auction. With the tremendous growth in the filed there is room for competent auction companies to pursue the real estate auction in Arizona business. And the best part of all — you won’t have to wear a gold blazer.

For more information about a real estate auction in Arizona, contact Auction Systems Auctioneers and Appraisers.

Real estate auctions are no longer viewed as distress sales — on the contrary many home sellers are viewed as savvy sellers who want to avoid “the unknown” that comes with traditional brokerage methods of sale. The popularity of selling a home at real estate auction has increased so much that Good Housekeeping published an article entitled “Auctions! The New Way To Sell You Home.” The attraction of the auction is the possibility that a bidding war will drive up the sales price. It’s not just sellers who are benefiting at auction, buyers who want to close quickly on a home are winning too. According to the article, “Speed is the greatest advantage of an auction: You (the seller) get to pick the selling date and the sale is over fast. So instead of spending money on a mortgage, insurance, and maintenance for the house you’re waiting to sell, you can reinvest quickly in a new home.” For sellers who need to relocate, auction is a sure way to settle the sale of their home quickly.

There are two ways to enter real estate auctions, 1) as an independent real estate auction company who obtains its own properties to sell or, 2) to partner with a real estate broker who provides you with properties to sell. As an independent there is substantial reward in a full commission, but exceptional investment of time and money to attract clients. Should you choose to partner with a real estate firm, the sale’s commission which is usually eight percent depending on the area of the country in which you auction; the commissions are split between the company.

In Arizona, depending on who you ask, you are not required to have a real estate licensee to auction property. The proposed Arizona auction law draft would however, require a license real estate agent to have an auctioneer’s license. Even without the clarification of current laws, I suggest you err on the side of the law and obtain a real estate license. Attending real estate school can be as quick as two weeks and cost less than $500. Upon completion of school, you sit for the state exam. What you learn in real estate school will be invaluable during your real estate auction career.

For more information about real estate auction, contact Auction Systems Auctioneers and Appraisers.