The Benefits and Risks of Real Estate Auctions

As many people have discovered, the traditional realtor firm isn’t the only way to sell a property. Real estate auctions are increasingly popular among people who buy and sell properties. As an alternative to the traditional marketplace, “[t]he benefits of selling via auction are particularly obvious during the bidder qualification period.” (Source: “Brokers See Benefit of Auction Process”, National Real Estate Investor) If you haven’t considered the auction route, you should keep the following benefits and risks associated with the auction process in mind. You may find that it suits your property-selling goals.

Benefits of Real Estate Auctions

One of the major reasons sellers seek the auction format is because it often allows them to dictate terms and conditions as well as a deadline. Selling for cash also allows sellers to move forward with their plans without delay once the sale is made. Since roughly 90% of auction sales close, there is every possibility that the deal transaction will close without a hitch–particularly with pre-approved buyers in attendance at the auction.

When it comes to complicated properties, many auction houses actually recommend the use of brokers. This provides sellers with the best of both worlds–the auction format coupled with the selling expertise of the realtors. Often sellers obtain great prices for properties they sell at auction–more than they expected. This is usually because buyers come prepared with a cap and may bid until they reach that cap.

Risks of Real Estate Auctions

While selling properties at auction often results in a great deal, it doesn’t always. There isn’t any guarantee that the price will be bid up by other interested parties. Also, sometimes bidders do not have the opportunity to have home inspections. Buying a home without an inspection is risky for the buyer, so the more inspection information you can present the better. Property sellers “have dozens of decisions and choices on both advisor sale terms and many auction formats.” (Source: “Commercial Real Estate Auctions in Soft Markets”, Heritage Global Partners) It’s important to weigh these considerations carefully. What is the minimum acceptable bid or can the property simply be let go to the highest bidder? These questions must be mulled over in advance.

Sellers who sell at auction have to rely on marketing. While a great auction firm often has regular clientele, some may not do all they can to market your auction. You may want to promote your upcoming sale online or at other venues in order to attract potential buyers to your sale.

Work with a Reputable Auction Firm

When you attend auctions hosted by reliable and respected auction houses, you’ll feel more comfortable about the process and may even find that some risks are mitigated. Many sellers find the auction route liberating. They can plan accordingly because they know what day they are selling their house. Working with a trusted auction firm with experience in real estate is essential for sellers who may be new to the action process.

These are a few of the pros and cons associated with selling a property at auction. Before you make your decision, talk to an auction house that can answer your specific questions and address all your needs.

Source:

“Brokers See Benefit of Auction Process”, National Real Estate Investor, http://nreionline.com/retail/brokers-see-benefit-auction-process

Luxury Real Estate Marketing: Is Customer Service a Luxury?

“The greatest danger for a luxury firm is to lose its status as a differentiated, premium brand, but wealthy consumer perceptions suggest that luxury overall may be in danger of losing its cachet,” said Milton Pedraza, CEO of the Luxury Institute. “This calls for a renewal of efforts to be unique and exclusive and to execute well on customer service.

The most frequently cited qualities that define luxury-superior quality (76%), craftsmanship (65%), and customer service (57%) – are the areas where wealthy consumers are finding the greatest dissatisfaction. More than half (56%) say that craftsmanship of luxury products is on the wane; 51% say that quality is decreasing; 50% notice a slippage in customer service quality and 48% say that luxury products are losing their design value.”

How does this apply to luxury real estate marketing? Real estate as a profession is a service business, real estate agents and brokers are service professionals. As we interview agents across the country for our series 50 Top Luxury Markets in the USA, we find that those who respond immediately to our queries are thriving in their marketplaces and those who want to eclipse the market leaders. They are easy to access, willing to share their insights, passionate about their marketplace, return calls and emails promptly and are a delight to talk to. One of the top market leaders recently interviewed said that you have to be nice to everybody regardless who they are or what their status in life. He returns everyone’s calls personally. As a result his client lists grows and referrals are plentiful.

Many of the agents we interviewed who are market leaders did not have websites, do not engage in social media, and do not know or care what SEO means or being #1 on Google. They are differentiating themselves on service, manners and excellent communication skills. They knock on doors; they meet people day in and day out. They are relationship oriented. They network face to face. They practice the fundamentals of business. They water plants for their sellers when they are out town. They send handwritten notes, birthday cards, and take their clients out to lunch. Tech is not the priority focus in their success equation and in many cases has been relegated to the back burner.

Luxury by definition implies rarity and exclusivity. Given the results from the Luxury Institute, it is evident that customer service is a key indicator in choosing a brand/service professional. People will remember you for your luxurious service. In our practice as branding and marketing strategists, we feel that customer service should take priority, and technology should facilitate customer service.

Luxury Real Estate Marketing – Maintain Your Visibility – Part 1

It has only been a few months since the 2010 Winter Olympics. An American won the gold medal for figure skating. Can you remember his name? Can you picture his face? Achieving top of mind status is quite an accomplishment. Staying top of mind is a whole other matter in our attention-deficient world. Studying how celebrities maintain visibility can reveal personal branding secrets that can give you a competitive edge as a luxury real estate marketing professional.

You might remember Evan Lysacek’s stellar skating performance in Vancouver, BC. But, just in case you forgot his face or name you can find Evan appearing on TV in Dancing with the Stars. Is it a coincidence that he is a featured dancer on the show just after his Olympic triumph? Chances are he has hired a talent agent to keep his name and face in front of your face.

Why is visibility so important and what is at stake? Product endorsements and skating show gigs are some of the ways that Evan can cash in on his celebrity. For luxury real estate agents, being visible and achieving top of mind status in your marketplace means more referrals. The higher your recognition and appeal factors are, the more likely you are to secure the lion’s share of the market.

In media, marketing, advertising and public relations the measurement of your familiarity and appeal is known as your Q Score. The Q stands for quotient, as in recognition quotient (amount, share or percentage) within your target market.

An example of a luxury real estate professional who has achieved a very high Q score is Barbara Corcoran in New York. She certainly stands out as a celebrity real estate expert whose opinion is continuously sought out by the media.

With the advent of social media and self publishing through multiple media channels, the opportunity to build a personal brand and achieve celebrity status in your marketplace has never been better. If market leadership is your quest, seize the opportunity to gain and sustain visibility.

Authoring a follow- worthy blog that is buzz-worthy is one way to get you there. See part two of this series for more details.