To help make you feel more comfortable in our auction setting, here is a list of auction terms that are regularly used at auctions.
If you have questions or would like to speak to an auction specialist directly regarding buying or selling your property at Cates Auction, we invite you to give us or a call at 816-781-1134 so we can learn more about how we can best serve you.
If you’re considering auctioning a property, you might have several questions, from how it benefits you and buyers to the terminology used at the auction itself.
At Cate’s Auction Real Estate Company, our relationship-focused agents aim to ensure you know what to expect at a property auction, so you can sell your property confidently and quickly. We’ve answered some common questions we’ve received about how property auctions work below.
An auction is an accelerated method of selling a home or real estate property via an open-cry, competitive bidding process. Auctions attract buyers who have pre-qualified for financing and are ready to buy. Auctions also create healthy competition among buyers, so you are likely to receive an excellent price for the property.
Auctions are excellent for individuals who wish to sell a property at fair market value quickly. An auction eliminates the expenses of long-term carrying costs and the time-consuming need for open houses and private showings. An auction also ensures a robust marketing campaign that improves buyer interest in the property.
Now that you know the benefits of an auction, you might be wondering — what are some typical auction words and phrases you might hear on the lot?
We’ve put together an auction terminology glossary so you know what’s going on at all times. Read on to discover several common auction terms and learn about their meanings.
If you’re ready to sell or buy real estate by auction, contact Cate’s Auction Real Estate Company today. We’ve proudly provided expert auction services to the greater Kansas City metro area for over 70 years, and we are happy to hear from you with any questions you might have. Browse our current auction selection, including residential, commercial, land auctions and more.
Or, if you’re considering auctioning your property, complete our free, no-obligation property auction analysis to see if an auction is the right choice for you!
There are more ways to sell your home than ever before. Alternatives to a standard agent-assisted sale are growing, so deciding on the best course of action is harder than it used to be. We’re often asked about how the “for sale by owner” process compares with an auction. Both methods offer an owner more control over the sales process, so it’s a common question. There are several big differences between selling a house at auction versus a private sale.
This guide will help you understand how marketing and selling a house at auction compares to private sales. Read on to learn more about the pros and cons of each choice and how to decide on the best strategy to sell your home.
Is auctioning your house a good idea? For many, the answer is “Yes!” It’s a fast and hassle-free alternative to attempting to sell your home by yourself or listing it with a Realtor. In its most basic form, a real estate auction occurs when qualified buyers submit competing offers on-site or online, resulting in the sale of the house to the highest bidder. If you’re wondering how to put a house up for auction, here are the steps you should follow.
When you sell a home, choosing an auctioneer is your first step. When selecting an auctioneer, find one who specializes in your specific property. Some auctioneers who sell real estate might specialize in a particular area like commercial or residential. As you research auction companies to sell your home, make sure you choose one that has the experience to sell your property.
Cates Auction has experience selling commercial and residential properties as well as land.
Once you have chosen a qualified auctioneer, your next step is to decide whether to set a reserve price. A house sold at auction can be offered “with reserve” or “absolute” (no reserve). A reserve is the lowest bid that a seller is willing to accept for the property and is established with the auction company in advance.
If you do not set a reserve, your property will sell to the highest bidder in an Absolute Auction.
Unlike most private sales by owner or through a Realtor, houses sold through auction are sold as-is. This means the buyers cannot ask the sellers to do any additional work on the property. Additionally, bidders may not add any conditions or contingencies. With an auction, selling your house isn’t tied to appraisals, inspections, financing for a mortgage or any other conditions the buyer may want to add. Instead, Cates Auction has strict requirements for bidders, which weeds out less serious buyers before they are allowed to bid.
Before the auction, professional real estate auction companies, such as CATES AUCTION, will aggressively market the house in a variety of ways to generate maximum interest. Extensive signage, direct mail, print, online advertising, social media, email marketing, telemarketing, and other channels are all used to promote the property and notify potential buyers of the upcoming auction.
SELLING YOUR HOUSE, LAND, OR PERSONAL PROPERTY by yourself is usually referred to as “For Sale By Owner,” or FSBO. It’s different from auctions and most private real estate sales because you don’t have a professional to guide you or to handle the advertising and selling process.
FSBO sales appeal to motivated, do-it-yourself homeowners. One of the biggest reasons people turn to FSBO sales is to try to avoid paying real estate commissions. Realtors charge a commission (SIX PERCENT IS STANDARD), and sellers are responsible for paying it when their home sells.
Selling a home yourself is contingent on your skills, motivation, and time. If you have plenty of time, don’t have a strict moving date, are familiar with real estate regulations/contracts, and are experienced at marketing, a FSBO sale can work well. Many people don’t fit this profile, so it’s no surprise that many FSBO listings don’t sell, and when they do, the average FSBO home sold for less than other types of homes.
Here A FSBO HOME NETTED $210,000, compared to $249,000 for agent-assisted sales. In short, FSBO home sales tend to take longer than other sales options. One survey showed that one in five FSBOs sells.
Selling a home through a traditional Realtor is a third option and by far the most common approach. We’ll briefly cover agent-assisted house sales, since most people are already familiar with this option. Working with an agent to sell a home includes some of the pros and cons of both FSBO sales and selling a home at auction. You’ll contract with a Realtor who should market and promote your house until it is sold or until your listing agreement expires. A Realtor will represent you in ongoing negotiations with any prospective buyers and their agents.
Unlike an auction, an agent-assisted house listing doesn’t include an actual sale date and the buyer usually stipulates the terms. An agent-assisted sale usually takes longer than selling a house at auction, but can be shorter than trying to sell a home yourself. Prospective buyers can submit offers when they’re interested, and the seller can choose to enter into a negotiation. Typically these offers are contingent on a variety of factors and often include requests for sellers to do additional work or cover additional expenses. A minimal, refundable deposit is usually included. If more than one buyer surfaces, those buyers don’t see each other’s offers or directly compete with one another.
It’s wise to LEARN MORE ABOUT HOW AUCTION SALES COMPARE TO REGULAR SALES before making your decision.
Auctioning a home and selling through other means both have a range of benefits. The option you choose may depend on your specific situation. Here are some significant factors that differ between auctioning and selling a property.
When you sell using an auction process, the buyer must pay real estate commissions and a deposit instead of you. You can also avoid high carrying costs. When selling a property, you may pay commissions to an agent and carrying costs as long as you own the property.
Cates Auction & Realty Company uses targeted marketing like signs, brochures, email and more, to attract a large pool of interested buyers. The shortened timeline of auctions also increases urgency, which may increase competition from buyers. In a traditional selling situation, an agent will advertise your home but may attract a different group of buyers.
In an auction situation, buyers negotiate the price of your property upward. In a traditional selling situation, you set an asking price, and buyers can decide whether to offer more or less than the price you set.
A competitive online bidding platform allows auctioneers like Cates Auction Real Estate Company to find buyers in as little as 30 days. A traditional selling process often takes much longer.
When you sell a property using a Cates Auction, you can set the dates and times for the auction. You can make the selling process fit your schedule. When you work with a Realtor, you have less control because most of the process depends on your agent. In an FSBO situation, you have more control but fewer resources at your disposal.
Sometimes. Though it often depends on the situation, selling your property at auction can help increase the buyer pool, leading to higher competition and selling price. In a market downturn, selling your house at auction can also help you get true market value for your home while selling quickly.
Auctions are used to sell residential and commercial property, as well as tracts of land. The properties sold by professional auction companies are usually similar to those sold directly by owners. So how do you decide whether selling at auction is the right way to sell your home?
The National Association of Realtors (NAR) suggests the two-thirds rule to determine whether selling a house at auction is the best decision for your situation. Assess the market, the property, and your situation. If two of these situations favor an auction, it’s usually a good way to sell your property.
Auctions are a good way to sell homes in a variety of markets. To maximize the value of an auction, look for a market that:
Consider an auction when the property:
Ideal auction situations include scenarios where the seller:
As a side note, auctions are AN IDEAL WAY TO HELP ELDERLY PERSONS SELL A HOME WHEN DOWNSIZING. If you’re helping a family member in the Kansas City area downsize, consider our SENIOR TRANSITION AUCTION SERVICES. We’ll work with you and your family to make their move easy while securing the greatest values for their home and unneeded personal property. If you’re considering selling a house and belongings together, consider our personal property and estate sales.
An auction offers several benefits, such as a set timeline, increased competition and more serious buyers. However, it’s not for everyone. You may choose a private sale for a more discrete selling option with no agent commission and an opportunity to gauge interest in the property before you list it officially.
A number of variables can affect your decision about how to sell your home. Here are some additional considerations to make when choosing to sell a house at auction vs. private sale:
If you’re wondering why auction a house instead of selling, these considerations could help you decide. Also, consider the following answers to some of the most frequently asked questions, or check out our SIX SIMPLE S’S TO SELLING YOUR HOME AT AUCTION.
In addition to vast differences in marketing strategy and purchase terms, your timeline for selling your home is one of the most important considerations when deciding between FSBO and an auction. Selling a house via auction marketing usually takes no more than 30 to 45 days (often less), and the auction itself is simply the conclusion of the process. Most of the work happens leading up to the auction and is focused on promoting your property and the bidding opportunity. Here are the three steps to the auction process:
A well-planned and property-specific marketing campaign with a clear call to action is crucial for selling a home at auction. We (1) use a wide variety of channels to reach potential bidders, both online and in-person, (2) combine signage, print media, MLS and other listings, online marketing, direct mail, digital advertising, and social media to promote a home, (3) also, reach out to buyers’ agents directly.
During this time, we’ll host pre-sale inspections of the property for potential bidders and provide them with more information about the house, encouraging pre-auction offers and advance online bidding.
Throughout this phase, we’ll keep you updated with detailed weekly reports of all our activities and results.
Once the auction ends, the winning bidder is responsible for paying the non-refundable deposit and signing contracts immediately. We’ll work with the title company, buyer and seller to complete the closing process according to the auction terms.
Because they are open-ended and have limited exposure, most FSBO sales take significantly longer than auctions.
If you don’t have an interested buyer right away, expect a FSBO sale to take longer than your other options. Up to half of FSBO homes sold already knew who their buyer was going to be, which is why it has a fast reputation. But those who didn’t have a buyer lined up were listed on the market for a few weeks longer. In addition, FSBO homes sold for an average of 5.5%-26% less than their actual value.
Agent-assisted sales also usually take longer than auctions. In addition to the time to get a property under contract, a traditional sale leaves a number of “outs” for a buyer to exit the process without consequence right up until the closing day. A contract that fails to close means that a property that has been tied up in escrow must now be put back on the market and the process started over.
The auction company’s marketing department promotes an auction for a home, not the homeowner. This removes a significant burden (and risk) during the already busy process of moving and selling a home. For many people, marketing their home is the most intimidating part of the sales process because they don’t possess the necessary expertise or have access to the necessary tools. Working with a professionally staffed real estate auction company removes these obstacles.
Compared to FSBO homes, professional real estate auctions are promoted far more aggressively across a wider variety of channels, helping to generate interest among potential buyers in a much shorter timeframe. This is possible because the sale date is predetermined and the advertising is built on a fixed schedule and budget. The process cannot be replicated on an open-ended listing. Marketing for a home auction targets key buyers by combining:
When we promote an auction for a home, we use a well-planned marketing strategy that targets interested buyers. If you want to sell a home and your personal property simultaneously, our accelerated marketing strategies make it simple without any additional advertising expense.
By contrast, FSBO sales have relatively few marketing channels available to them. The most popular techniques used by homeowners selling their homes include:
Few homeowners use every channel. Generic yard signs are the most popular channel for FSBO homes because they are easy and cheap, but only 42 percent of homeowners use them. Other proven marketing techniques, like direct mail, were used in less than ten percent of FSBO listings. Professional networks and industry tools such as MLS are rarely available to FSBO sellers.
It is worth mentioning, again, that in addition to differences in advertising methods, there are also significant differences in the advertising message or “hook” offered to buyers. The FSBO message is simply that a home is for sale and there is an invitation to begin a negotiation on the buyer’s terms and timeline. In contrast, the auction message is that the home will be sold to the highest bidder on the specific date. Buyers understand that the property will, in fact, be changing hands and that they must act.
Yes, you can convert your listing to an auction at any time. It’s common for agents and homeowners to change strategies to utilize auction marketing to get a home sold. In fact, we have an entire program dedicated to partnering with real estate agents.
That’s great! During the process of advertising the auction, it’s not uncommon for a buyer to want to make an offer in advance of the auction date. They simply submit the offer on the auction contract (all the same terms apply) and you decide whether to accept the offer and cancel your auction or decline the offer and invite the buyer to participate in bidding.
Not likely. Auction marketing exposes your house to a broader audience of buyers and competitive bidding means you sell it to the person willing to pay more than anyone else. That’s market value! The alternative of waiting it out for a particular price can sometimes work, though carrying costs must be considered in the true net, as well as the risk that no one surfaces. Traditional offers with higher purchase prices often include additional expenses to the seller that erode the ultimate net return.
That depends on how the auction was structured. There are two types of real estate auctions: absolute and reserve. An absolute auction will sell to the highest bidder. This type of auction generally draws the largest buyer pools and, therefore, the best selling prices. A reserve auction has a minimum bid requirement set by the seller at the time of the listing. If the high bid falls below the reserve, the seller must decide whether to accept it.
In some instances, the reserve or minimum bid may be published if the auction company believes it will help the sale and the seller agrees.
At Cates Auction and Realty Company, our staff will work with you to determine the best type of auction for your situation and property.
There are several aspects to the cost of selling that must be considered:
Cates Auction offers a property selling option different than the traditional methods. Selling properties the conventional way doesn’t always make sense. With Cates Auction, you can enjoy a home selling experience where we focus on distinguishing your property from others on the market. You’ll also benefit from a timeline that suits your needs.
We’re happy to answer all your questions, discuss your selling goals, and help you determine if real estate auction marketing is the best solution for you. Speak to a Cates Auction Specialist at 816-852-8059 or request a FREE PROPERTY ANALYSIS.
No matter how strong your love for your parents, the thought of seeing them through a home sale and downsizing can feel overwhelming. Sometimes even elderly or aging parents are torn about whether to move or not, which can escalate fears and uncertainties.
Many times the individuals and couples who most need to downsize are also the ones who are most embedded in their homes. Your parents are looking to you for the support and assistance they need to take this next step in life. But just because it’s the right choice, doesn’t make it an easy decision.
Preparing a home for sale is always challenging, especially when the existing residents have been there for decades. These many tasks include:
At Cates Auction, we’re here for you and your parents. We’ve been helping elderly parents sell their homes in the greater Kansas City area for 8 decades. Our well-developed comprehensive senior transition auction services include marketing your parents’ home and securing the highest return on investment by facilitating an auction on the day of their choosing.
If downsizing includes selling belongings along with the real estate, our personal property auctions offer a quick and easy way to meet that need as well. If you’ve been asking questions about how to help your parents downsize their home, we have the answers and solutions. Let us simplify the process for you!
You want experience on your side when downsizing elderly parents in Kansas City. At Cates Auction we offer 80 years of experience in working with parents just like yours to successfully and seamlessly downsize into the perfect new home for them.
We focus on understanding your parents’ goals and needs and then using our knowledge and experience to provide the perfect solution. Our team is unmatched in helping you and your parents sell their home in Kansas City.
When is the best time to sell a home? At Cates Auction, we hear this question a lot.
So much so, we’ve aggregated our insights to put together a guide on the best time of year to sell your house. Whether you’re going the ordinary real-estate agent route, placing your property up for auction or taking matters into your own hands, there are numerous home-selling angles to consider — from target demographics and interest rates to welcoming showing weather. In fact, the best time of year to sell a house may surprise you.
When you should sell your house is one of the most pressing questions for sellers today. Alongside determining a listing price, few considerations strike as close to home — literally and figuratively — as timing the market.
Much of today’s advice surrounding seasonality of home sales comes based on when sellers think they should sell or when it is most convenient for them to do so, not objective buyer demand.
This makes sense, but it doesn’t delineate existing market trends in the season and month — and even day — that active buyers tend to seek real estate.
Your finances, season of life, and comfortable selling timeframe are the first critical considerations. What’s more, how you intend to list your house — through ordinary real-estate agents, for-sale-by-owner (FSBO) or auction — will further influence when you should place your home on the market, as each supports different timeline advantages.
Traditional market wisdom states March through June is the best time of year to put a house on the market.
More specifically, the month of May is heralded as the seller’s sweet spot, according to data published by national property database, ATTOM. Homes sold in May via real estate specialists see premiums almost six percent above estimated market values compared to any other month.
It’s important to note, however, that seasonality trends effect FSBOs and ordinary sales, not auctions. Since real-estate auctions have a single pre-determined date, buyers and sellers alike know precisely when the sale will occur. No lingering uncertainties, no delays, no limbo. Auctions work well 12 months out of the year!
Depending on where you live, the weather could further boost your ability to sell your home on a timeline that works best for you.
Inclement weather like rain or snow can slow down market demand for traditional listings, particularly in areas that experience sustained amounts during the winter season.
On the contrary, areas in the country that experience a snowbird effect see demand for housing increase during winter months, regardless of their own weather patterns. Sellers looking to target this demographic may choose to list closer to the winter months to attract appropriate parties. Auctions that offer the convenience of online shopping and buying can offset weather concerns.
Traditionally, September through October typically sees the next best period of home sales. These months sit before the busy holiday season (November to January) and experience temperate weather, but remain a distinct second to the spring fever that hits beginning in March.
Buyers and sellers alike looking to make the most informed property decision should account for seasonal trends in their regional markets. Yet on-seasonality isn’t the end-all-be-all when it comes to listing properties. In both situations, there are benefits and drawbacks to bear in mind.
Another essential aspect to selling your home on a favorable timeline? Knowing your audience — that is, the very buyers you intentionally and ideally wish to attract.
There’s an art and a science to this. Knowing your buyer allows you to make smarter selling decisions. Everything from using the best real estate marketing materials and posting on the right Internet listing services to staging the home and even planting the right softscaping to greet visitors’ eyes is informed by immersion in target audiences’ minds.
Explore the following buyer demographics to learn how.
Both individuals and young couples looking for their first home are more likely to begin that search in January and February. More than half of them are married, have a median age of 32, and settled at $182,000 for their first home with a six percent down payment.
Research also indicates this group most values detached, single-family homes. They’ll spend a longer amount of time perusing the market, as well, with first-time home buyer timelines averaging eight weeks and viewing nine to 10 homes. They find those prospective homes using Internet-first searches, turning to mobile devices to initiate 72 percent of viewings. Online auctions are especially suited to this demographic.
Buyers with families are most likely to search for their new home during the on-season. They tend not to want to pull kids out of school for any extended length, as well as, avoid house hunting during the holidays.
The best time to list your house if targeting families remains the spring and summer months. However, the best time to auction property — if going this route — will be more flexible. Families relocating due to new jobs, changes in family circumstances or other unforeseen events may be attracted to the linear security of an auction sale. Likewise, you’ll have more assurance and a tighter selling timeline from that audience. The convenience of online bidding is appealing to busy families.
Downsizers are individuals ages 65 to 74 looking to reduce housing expenses or adopt a more maintenance-free lifestyle. Data shows they prefer both buying and selling during the warmest months of the year. Their house hunts will also be shorter, viewing fewer properties than other demographics and subsequently making a quicker decision.
There is also a lot of competition for homes that traditionally appeal to downsizers, such as bungalows, ranches, single-story homes, and condominiums. In fact, the average downsizer in 2017 sold their old home for $270,000 — only to move into their new one for $250,000. Auctions work exceptionally well in situations where strong competition is an excellent vehicle for driving up to the highest price.
Vacation properties appeal to their own demographics and run on their own showing timelines.
Unlike conventional wisdom states, the ideal time to sell vacation properties is rather intuitive — When does the home, cabin, lake or beach house look best? That’s when it should be listed — not on a set seasonal schedule. Keeping in mind, of course, that buyers may want to have possession in time for a major holiday or prime vacation season.
You’ll likely attract individuals who use vacation properties as prominent investment assets or, even more common, buyers who weren’t actively looking, but caught wind of a property and couldn’t pass it up. Perhaps the vacation home sits in a destination they love and visit multiple times a year or is reminiscent of a beloved childhood spot. Either way, opportunity, and even sentimentality are critical here, not the season.
It’s important to note that all of these guidelines are just that — guidelines, not textbook rules. There is considerable variation in what causes buyers to actively look for homes, each driven by individual needs, opportunities, and circumstances. Many simply don’t fit into the generalizations above. And, the more compelling your property and your selling proposition are, the less these factors will impact the outcome.
The housing market is a notoriously interwoven one, with macro- and microeconomic variables, banking policies, government regulation, and the general state of the economy all wielding a say in its health.
In this mix of influences, few are as essential as interest rates and the wider market demand in your homes area.
Lower interest rates benefit home buyers and sellers alike — just on different ends of the equation.
Simply put, they make it more favorable for interested buyers to acquire reasonable financing in the form of lower interest rates on their mortgages. This, in turn, produces more people eligible to get loans to buy a home, raising the number of potential buyers and therefore increasing the average housing price. For sellers, this is music to the ears, plus advantageous to new those homeowners, as less interest compounds across their 15 or 30-year loans. Even though most professional auctions allow for financing, auctions often generate more cash buyers and are therefore less reactionary to interest rate fluctuations.
Inventory levels in your housing region are also critical when best timing the market.
A high state of demand with low supply — that is, when the area’s buyer pool is large but available properties are tight — is called a seller’s market. Conversely, an area saturated with listings but lacking buyers is a buyer’s market.
Knowing when to put your property up for auction, FSBO, or through a real estate agent, means knowing what your area is currently experiencing. You can, therefore, position your home’s listing and its marketing appropriately for the current local supply and demand situation.
Finding the perfect buyer for your home is an active process. It involves strategic advertising, staging, and incentivizing while also ensuring ideal buyers find you in the first place — then fall in love with your home just like you did.
Any party selling property in 2019 and beyond must grasp this reality — buyers start their search online.
Nearly all generations of home buyers turn to the Internet when looking for properties. Both computer and mobile device searches dominate, driving over half of all prospective real-estate selections and — ultimately — purchases. This is especially true of younger and first-time homebuyers (ages 37 and below), as 92 percent of them will use online websites and directories to find and research prospective homes.
Only seniors are the exception. Buyers 72 and up will turn to a real estate agent or company first to begin their house hunt.
All this points to the importance of generating maximum exposure when marketing your property. This means comprehensive multimedia campaigns using both print and digital resources to get the most eyes as possible on your listing.
The current home-buying landscape also includes knowing the length of searches.
Buyer’s house-hunting timelines depend on age. Industry research points to the following averages, which should be taken into account if marketing and auctioning your home to a specific demographic:
To experience the best home selling process possible, sellers should look beyond seasonality in the housing market. Take into account both your current needs and long-term goals. These must align to sell your property in a way conducive to your realistic lifestyle and will include the following considerations.
Cost considerations are crucial to selecting the best selling option for your current financial situation.
Under certain circumstances, you can’t wait around for the best time of year to sell your home. There are a number of such situations where “timing the market” isn’t the primary concern:
There are three primary options for getting your property listed and sold — through ordinary real-estate agencies, through auctions, or by independent FSBO.
Each carries its own timeline averages. Don’t be afraid to do your research, selecting the sales option that genuinely fits your schedule, your finances, your risk tolerance, and more:
Cates Auction brings accelerated auction marketing expertise to each property it sells — and confidence to its clients that they’re getting the support they require in the sales timeline they need, tailored to exact circumstances.
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