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June 27 2016

commerciallandauction

Sellers Set the Stage: What a Property Auction Can Offer a Prepared Seller

Unbeknownst to many, auctions put a lot of power in the hands of a seller. Auctions are a ground for sellers to make all the demands they desire. Now, the demands may not always result in a sale. But, its grounds for getting pretty close. Sellers can retain a lot of control in the sale of their property. It is an aspect that makes commercial auctioneers appealing and viable for property owners who find themselves in a specific kind of situation.

What kind of control will property owners have?

Property owners can determine all the features that they find desirable. This could include a date for closing. It is usually a timeframe of about 30 to 90 days. Sellers can determine what is included in the property sale. This is usually relegated to connected property or all furnishings. The former means the sale only includes what is physically connected to the property (the structure).

Allen Baler

There is one aspect that property sellers cannot determine, and it is often the one thing that is most valuable- the price. With commercial property auctions, sellers cannot determine the price. Traditionally, sellers set all aspects of the sale, including closing dates, inspection times and periods, and closing date timeframe. The buyer then determines what they are willing to buy the home for given all these determinations. If they are too intrusive, there may be few bids. Everything but the price is clearly stated.

What can sellers do to sway the price?

Sellers can work around the lack of a determined sale price by setting a minimum bid. This is the lowest that can be accepted. There are two ways this can play out. The first is that the commercial auctioneers begin the commercial land auction at the minimum. The other is that they hide the minimum and only announce it once it has been reached.

Both of these strategies will often diminish potential bids. Buyers are already restricted by the terms. The price restrictions may be enough to cost the sale entirely. A buyer may have an idea of what they will spend, only to be pushed away with a higher-than-expected minimum. Furthermore, low minimums (or the absence of one) can drum up interest that would not necessarily be there otherwise. A final way to sway the price is to lose some of the control. Offer a wide-open sale. It could be an open-date close or a general lack of restrictions. This could stir some buyers to the property. 

Don't be the product, buy the product!

Schweinderl