Auction processes can appear complicated, but generally fall into one of two Types & Formats:
Absolute or Reserved,
Live or On-Line.
Auction Types & Formats
Bidding Venues & Strategies For Real Estate
and Personal Property Auctions
There are several methodologies, one of which will best assist in the sale of your property.
Regardless, you , the seller, control the timing and the terms of the sale.
The auction strategy (or strategies) and venue employed is based upon many factors:
- The value range of the property
- The condition of the property or merchandise
- The number of properties in the portfolio or size of the collection
- The location, accessibility and security
- Current market conditions
- The buyer profile or target market and most importantly, your goals.
Which ever auction strategy we propose for your property, auction is the very best method of maximizing exposure and price, while minimizing carrying costs of no longer needed assets and expenses to the seller.
Venues
Live Bidding: Live bid auctions are just that; live. During a live bid Real Estate auction you would expect to bid on real property just like you would bid on an antique, a work of art or machinery. A live bid auction is typically a public event where bidders and spectators are able to enjoy the show together. Live auctions may take place at the premises or another site better suited to handle expected turnout. This is our prefered venue for Real Estate sale.
On-Line: Bounds Auction Company has invested much time and capital mastering the offering of real estate & personal property auctions on-line. We currently offer 4 different on-line platforms:
#1. Timed, On - Line Only:
This is not unlike the eBay format. Due to a current contractual arrangement, bidding can now be offered across a group of well known global electronic bidding platforms simultaneously, including eBay, all through a single interface. This technology allows not only the greatest number of bidders, but eliminates a great deal of expense to the seller. This is our preferred method for on - site estate sales and special collection offering.
This venue is also becoming popular for Real Estate
#2.Real Time, On-Line Only:
All bidding is accepted - in real time - live - via the internet only. This is our primary means of offering high value personal property. This is not a timed event. Bidding opens at a low minimum opening bid and continues to a natural resolution.
#3 On-Line/Live Hybrid: On-line bidding in concert with live bidding.
Where time and space is available, this is very effective for high value property and unique items. As described, bids are taken both live and from pre qualified bidders via an internet connection, no differently than a phone bid would be. Many of our Real Estate offering will employ this technique.
In all cases, a preview is held prior to the offering.
Auction Types, Formats & Strategies
An absolute auction is just that; whatever the high bid, the property is sold.
An auction with reserve; the seller “reserves “ the right to sell by setting a minimum
or withholding final approval.
While Bounds Auction Company rarely recommends absolute terms for real estate, there are circumstances when it is appropriate. Most all personal property is offered absolute.
Absolute will out perform any other auction terms. Nothing can stimulate attendance, interest and bidding like the knowledge that the next bid can win. Performed properly, there is little risk.
Reserve auctions come in a variety of formats.
- Confidential Reserve: A minimum value is established between the Auctioneer and the Seller. Once bidding exceeds this reserve, the Auctioneer can execute the sale on behalf of the Seller. If reserve is not achieved, the Seller is under no obligation to sell and the auctioneer may not declare the property sold without consent of the seller.
- "Subject To Seller’s Confirmation ": The premise of a by confirmation auction is that there is no minimum opening bid or contractual reserve empowering the auctioneer to sell. The seller retains the right to refuse or accept the final bid.
- Published Minimum Opening Bid: Similar to the confidential reserve format with the exception that the reserve is published as part of the marketing program. Bidding openings at that reserve and the Auctioneer can execute the sale on behalf of the seller at the highest bid in excess of the opening bid. This published reserve must be a valid reserve at which the property can sell and not simply a mandated opening bid. For this format to be effective, the published reserve must be very, very attractive.
Success of any by approval or reserve offering depends upon achieving seller's acceptance quickly. Bidders must know they can buy for truly competitive bidding to take place. The goal of either reserve format is to meet the expectation of the seller, then by releasing the property to the bidding, to exceed that seller's expectation.
Other Bidding Strategies
High Bidder’s Choice: In this style of bidding, similar properties or merchandise are grouped and bidders may bid for the right to select their choice from the grouping.
The highest bidder’s choice is then removed and a subsequent round of bidding begins for the remaining properties, again at high bidder's choice.
This style of bidding is most commonly used on the sale of condominiums, townhomes or building lots. This methodolgy is also popular with personal property of a like kind.
People will pay more to have their "choice," and will often buy them at at that price.
Sealed Bid/Tender Bid: A sealed bid auction is used when dealing with transactions where specific terms for the sale may not all be pre-determined. In this instance, the buyer has some room to negotiate the terms of the purchase of the property, and the seller is provided an opportunity to potentially receive a higher price, due to the terms of the deal being somewhat negotiable and in some instances, even conditional.
A Rolling Sealed Bid Offering is a combination of the Two Bid & Sealed Bid formats.
Two Bid: A ‘two bid’ auction includes a written pre-auction bid followed by a live auction. The live auction is then a restricted event including only those bidders that submitted an acceptable pre-auction bid. This system is used most often when selling unique or exceptional residential real estate or real estate along with other significant assets, like a turn key business package. Another variation is requiring bidders to offer an opening bid to register.
Multi-Par Bidding: Multi-Par Bidding is most commonly used on the sale of large undeveloped land where multiple parcels of land are offered. This method allows bidders to place bids for various configurations of parcels based on the bidder's desire to assemble the parcels.