Broker Presentation


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Broker Presentation

  1. 1. Real Estate Auctions: Advantages to Brokers and Agents
  2. 2. Topics <ul><li>Introduction </li></ul><ul><li>Overview of real estate auctions </li></ul><ul><li>Advantages to using use real estate auctions </li></ul><ul><li>Q & A </li></ul>
  3. 3. <ul><li>A National Association of Realtors study estimates that “…one in every three properties sold, will be sold utilizing the auction method of marketing within the next seven years.” </li></ul><ul><li>The Gwent Group, Annual Industry Analysis - 2001 </li></ul>
  4. 4. <ul><li>Live auction revenues reached $240.2 billion in 2005 </li></ul><ul><li>$51.2 billion dollars of property was sold at auction in 2005 </li></ul><ul><li>Residential sales increased 8.4% over 2004 </li></ul>
  5. 5. <ul><li>“ The majority of auctions today don’t result from foreclosure of distress situations, but rather are the result of a seller choosing a cost-effective, accelerated method to sell a property.” </li></ul><ul><li>Source: National Association of Realtors, </li></ul>
  6. 6. Overview of Real Estate Auctions
  7. 7. Features & Benefits <ul><li>Multiple qualified bidders the day of the auction </li></ul><ul><li>A property sale with No contingencies </li></ul><ul><li>A 30 day close </li></ul><ul><li>A 10% non-refundable down payment due the day of the sale </li></ul><ul><li>A comprehensive three to four week marketing program that is typically paid by the seller </li></ul><ul><li>Less time and money when selling a property (accounting for the time value of money, carrying costs, opportunity costs, etc.) </li></ul><ul><li>The 10% commission, also known as the buyer’s premium, is paid by the BUYER </li></ul><ul><li>Auction provides a catalyst to promote buyer interest </li></ul>
  8. 8. Features & Benefits <ul><li>The focus is on the seller’s property alone </li></ul><ul><li>A property sale that is controlled by the seller </li></ul><ul><li>The process manages the buyer </li></ul><ul><li>The price is set by the buyer through competitive bidding </li></ul><ul><li>There is no upside limit on the price </li></ul><ul><li>You leverage the buyer competition to determine price </li></ul><ul><li>Auctions realize the property’s true market value </li></ul><ul><li>Auctions bring together serious buyers and sellers by bringing buyers to the point of decision </li></ul><ul><li>Auctions are another option for sellers, buyers and real estate agents/brokers </li></ul>
  9. 9. Types of properties <ul><li>Residential </li></ul><ul><li>Commercial </li></ul><ul><li>Agricultural </li></ul><ul><li>Vacant Land </li></ul><ul><li>Industrial </li></ul><ul><li>Income </li></ul>
  10. 10. Advantages to Brokers & Agents
  11. 11. Benefits to Agents & Brokers <ul><li>You have the assurance that property will be sold at true market value </li></ul><ul><li>Auctions exposes the property to many interested people and generates a list of ready, qualified buyers. </li></ul><ul><li>There is nothing like an auction event to bring exposure to the property, and buyers with a sense of urgency to act. </li></ul><ul><li>Auctions are not fire sales or distress sales and generate excitement and interest in the property. </li></ul>
  12. 12. Benefits to Agents & Brokers <ul><li>Realtors potentially can see more sales with the options available by auction. Auctions offer your clients and customers new selling and buying options. </li></ul><ul><li>You can develop your own market niche. </li></ul><ul><li>Property is sold within a relatively short period of time. Consequently, Realtors can show their clients a guaranteed day of sale and a quick closing. </li></ul><ul><li>Auctions can bring people in to look at your other listings, not just the auction listing </li></ul>
  13. 13. Benefits to Agents & Brokers <ul><li>Successful auctions result in referrals and return business for you the agent/broker. </li></ul><ul><li>There are many types of auctions, from “Absolute” to “Subject to Confirmation.” We can fit the best type to suit your property. </li></ul><ul><li>Never lose another sale to contingencies. Auction buyers are pre-qualified and the high bidder’s deposit is non-refundable. </li></ul><ul><li>Realtors will also have the opportunity to pre-register a buyer to bring to the auction event and be compensated at closing. </li></ul>
  14. 14. Benefits to Agents & Brokers <ul><li>Commission splits are comparable or higher with the auction method so you can increase your revenue by earning commissions as a referring agent/broker, a cooperating agent/broker, or as the listing agent/broker. </li></ul><ul><li>You will have no responsibility to show the property, to take offers, negotiate, or for the cost of advertising, but still receive a commission. </li></ul><ul><li>PAX real estate absolute auctions experience a 99% closing rate. </li></ul>
  15. 15. <ul><li>Most properties can be sold at auction </li></ul><ul><li>However, not all property is suited for auction </li></ul><ul><li>To best evaluate your properties’ candidacy for auction analyze the three primary components: </li></ul><ul><ul><li>the property </li></ul></ul><ul><ul><li>the seller </li></ul></ul><ul><ul><li>real estate market/buyers. </li></ul></ul>Qualifying an Auction?
  16. 16. <ul><li>Property -- A good auction property is one that: </li></ul><ul><ul><li>Is unique with strong buyer demand or limited supply </li></ul></ul><ul><ul><li>Has a strong equity position for the owner </li></ul></ul><ul><ul><li>Has high carrying costs for the property owner </li></ul></ul><ul><ul><li>Is difficult to appraise thereby requiring competitive bidding to establish the fair market value of the property. </li></ul></ul>Qualifying an Auction?
  17. 17. <ul><li>Seller -- A good auction opportunity is one where the property seller: </li></ul><ul><ul><li>Is an auction-minded seller </li></ul></ul><ul><ul><li>Has confidence in their property and knows it will bring a fair market price </li></ul></ul><ul><ul><li>Has a strong equity position in the property </li></ul></ul><ul><ul><li>Wants to avoid paying sales commissions </li></ul></ul><ul><ul><li>Is time sensitive and requires a timely property sale that they control </li></ul></ul><ul><ul><li>Has high carrying costs associated with the property. </li></ul></ul>Qualifying an Auction?
  18. 18. <ul><li>Real Estate Market or buyers-- A good auction opportunity is one where: </li></ul><ul><ul><li>The real estate market and/or buyers are changing </li></ul></ul><ul><ul><li>There is a limited supply of the property type with strong buyer demand (ie: water front property) </li></ul></ul><ul><ul><li>There is a flat, or declining, market with little buyer interest for traditional property sales </li></ul></ul><ul><ul><li>There is limited to no demand for the property in question due to competition or supply. Consequently, the property requires the greater attention provided by the real estate auction method of marketing. </li></ul></ul>Qualifying an Auction?
  19. 19. Pacific Auction Exchange Questions?
  20. 20. Pacific Auction Exchange Thank You