I wish I was an auctioneer today, they are getting the business. Everywhere I turn, I see the same auction companies selling property. I am being asked questions about recent sales by auction. Here are several:

“What sort of sales price are auctions bringing?” They are bringing current prices. A current price can be more, or less, than what the auction company, or seller expects. It is the price you would expect to get if you have a sufficient number of people who will bid for the property at that specific point in time. Good real estate companies keep large databases of people that have interest in certain types of property. They are able to bring these people together and facilitate a sale through the use of a sales practice called “urgency.” – If you don’t act now this property may be gone in the next “hour.”

“How do current prices of today compare to two or three years ago?” 2006 and 2007 were great years for selling land. Currently, there are many properties that are selling at 50% to 60% of what they would have sold during those years. Camp Fincastle was on the market for six years. It was appraised and listed for $2.35M. It sold for $1.5M. Eight waterfront lots and seventeen interior lots at Heron Landing sold for $618,200, or $24,728 per lot. - In 2006 there were two waterfront lots that adjoined these that sold for $189,900 and $200,000. In 2006 a farm was purchased for $10,000 per acre and sold for $8000 per acre with an additional 5% buyer’s premium added. The fact is that you can not compare prices because markets change and because my opinion of value may be different than yours. Remember in an auction there is only one purchaser and the rest have said the price is too high.

“Are properties not selling at auction?” I don’t follow every auction but I know of a house in a great Lynchburg neighborhood where no one bid on the house. This house was close to where my mother lives and I saw the auction sign on Langhorne Rd. for weeks. It was also promoted in the newspaper, so it is true that some properties are not selling at auction, even when they are being well promoted.

Yes, I wish I was an auctioneer today because they are getting the job done. Some people are more willing to buy because they feel they are getting a bargain, or they feel the urgency. What they don’t understand is that any good piece of real estate can be sold today and it can be sold for 50% to 60% of the listed price, they just have to write the offer and find out.

Filed under: Buyer, Education, Lake Property, Seller, Statistics on November 8th, 2009