It’s no secret that there is a perception among the general public that an auction is a Seller’s last resort and they are giving their items away for low bids out of desperation. Some Seller’s share this perception and are hesitant to offer significant assets at auction.
Savvy Seller’s embrace this perception and choose the auction method to market significant assets at auction, including real estate. The savvy Seller understands that the general public’s perception will drive interest in their auction. More interest in the auction equates to more bidders in competition and consequently resulting in higher bids.
Sell What You Have, Not What You Have Left
Having an auction with significant assets results in more excitement for your auction. Today’s Buyers and Bidders are busier than ever. We pack as many activities as possible in to just a few short months, especially in beautiful northern Michigan. Creating an auction that draws people from their other activities is important. Can you draw a bidder away from the golf course for a Craftsman lawnmower, or would you need to include the collection of Winchesters? Some collectors would miss their daughter’s wedding for a good auction!
Great auctions are easier to market. Social Media marketing spreads like wildfire for an asset that people desire. A Facebook post about a 1957 Corvette for sale at auction will attract thousands of potential bidders to your auction’s web page, and expose them to the rest of the assets you have to sell. Conversely, a Facebook post with a round pointed shovel and cordless drill will receive far less attention. Create the auction that you would want to attend by selling assets that demand attention!
Tell Your Nephew to Buy at Auction
Handling an estate can be rough. Executors often have to juggle what is best for all parties and can never seem to make everyone entirely happy. We are often called to look at estates where family members are in dispute over which items they want. Emotions flare as sentimental value is compared with monetary value.
The solution to this scenario is “tell your nephew to buy at auction”. Put the item in the auction and give all family members the opportunity to buy it back. You’ll likely learn at what point the item lost sentimental value to each of them. Before the auction your nephew couldn’t live without grandpa’s Winchester. But, at some point while the firearm was selling he decided he’d rather have the money! If the firearm truly was irreplaceable to him, and he bought it at the auction, then you can be assured he was serious, you can be assured he paid market value, and he’ll likely be at least partially reimbursed from his share of the auction proceeds.
The other consequence of putting the item in the auction is that it helped market the auction and likely attracted more bidders for the rest of the items. The aggressive bidding on the Winchester also made it easier for another bidder to raise their bid on something else by establishing a market trend.
It Won't Bring What It's Worth
What it’s worth is exactly what it will bring. Auctions realize market value within a defined timeframe for all assets. The true market value may not be the same as a retail value because retail value often includes warranty and selection. Value within your preferred timeframe might also be different than the value in someone else’s timeframe. Asset values fluctuate between seasons and financial windows of buyers.
High value and high demand assets can be sold in any method. Some Sellers prefer the price control that is offered through selling in a private treaty method. These Sellers usually trade price control for time. They hold their asset in the marketplace until they achieve a desired price, or are forced to lower their price to shorten the time frame of selling.
Auctions certainly offer less price control, but a Seller who is willing to relinquish price control by selling high value assets at auction can benefit greatly. Some assets exceed Seller expectations, and some fall short. It’s important to keep in mind the impact your high value asset may have on the results of the entire auction. Often, the variance between your item’s market value and your perceived value pales in comparison to the impact on the entire auction results.
I am Praying for Nice Weather
Nope. Weather has very little to do with a successful auction. The quality of assets, the Seller’s reputation within the community and successful marketing have much more to do with an auctions success. In fact, most auction companies will tell you they prefer at least the threat of poor weather as they often see larger crowds. Nice weather opens up ALL the possible activities we could enjoy, whereas poor weather narrows the options and makes attending an auction more likely. Concentrating on the things we can control is far more productive than worrying about the weather.
Auctions Work! (When You Let Them)
Auctions have worked for centuries and they will continue to work, when we let them. Creating the best auction means trusting the process, including your high demand and high value items, and allowing for the market to determine their value. A successful auction has many qualities, and not all of them can be controlled. The above qualities may not guarantee a Seller’s expectations are exceeded, but they will surely place the Seller in the best position to succeed.