Real estate remains one of the least liquid of all financial assets. Selling a property can take months or, in some cases, years. An exception to this situation is the offering of real estate assets through competitive bid or auction marketing.
For more than 50 years, Max Spann Real Estate & Auction Co. has been servicing clientele who wish to sell property according to their timetable, under their pre-set conditions and at the highest competitive values.
Competitive bid sales or auctions are used in other industries such as fine art and wines, prized racing horses and automobiles, and, in the stock market, which is, effectively, a daily auction. These other markets seek the same result – a timely sale under their terms at the highest price.
Accelerated or auction marketing is the most aggressive and powerful means for a seller to present their property to the marketplace. When expertly crafted and executed by a firm like Max Spann, an auction marketing campaign will allow sellers to take control of the sales process and timing, dictate the terms and achieve real time results for the sale of their assets.
Through an auction, the seller sets the date when their property will be sold. In conventional marketing, a seller is reliant on an offer being submitted, negotiated and “potentially” going to settlement. This is a protracted process at best.
With auction marketing, settlement usually occurs 30 to 45 days from the actual auction date. Knowing when the property will be sold allows sellers to plan for the future, reduce carrying costs including maintenance, taxes and the unknown.
Sellers also set the terms and conditions under which a property is sold. Their property will be sold “as is” with no contingencies, inspections and reviews. This creates a level playing field on which bidders can compete to purchase the property and eliminates prolonged negotiations. Buyers know that the seller is committed to sale on a specific date, and, consequently, they do their homework and arrive ready to bid and buy.
In my first sales training 30 years ago, I learned that attention, interest, desire and action are the steps of a sale. These are what buyers go through when purchasing anything. As a marketer, if you don’t get their attention, you will never get to the second step.
The attention of the public is difficult to grab in today’s busy social media world. I have found from exit interviews with my buyers that any of them were not in the actively looking to purchase. When Max Spann sold a 55,000 s/f former Pathmark in Cherry Hill, it had been on the market for more than two years. Max Spann put the word “auction” on the advertising and the phones lit up. We got calls from end user businesses looking to locate their food and furniture stores, strip mall owners and the eventual winning bidder, who used the space for medical offices.
Through a concentrated, multi-faceted marketing campaign, intense market interest will be focused on the property. Furthermore, as the property is being offered through an auction format, the sense of an attractive purchase potential a “good deal” is heightened. This further drives purchaser interest and the number of potential bidders. It is then through the competitive bid forum that sales prices are optimized. Competitive bidding establishes confidence in pricing, eliminating uncertainty regarding value.
For example, Max Spann sold a 70-unit multi-family property in central Connecticut that the seller simply could not move. The marketing campaign brought out buyers from New York that normally would not have been looking for assets near Hartford.
Sellers should make sure to use an auctioneer with extensive experience and a history of sales within the same product type. An auctioneer that has sold dozens of commercial properties is most likely to have built up a database of prospects, familiar with how to advertise and discuss the unique intricacies of selling commercial property. Having your friendly Podiatrist preform knee surgery is not recommended.
Robert Dann, CAI, AARE is executive VP and COO for Max Spann Real Estate & Auction Co.