Introduction...... advice needed

[Slimpickens]

First of all, hello everyone. I'm new here but have been reading and taking advice from the forums for awhile now. There is a great wealth of knowledge here and always interesting to read.

Anyway, I was wondering if anyone has ever tried to sell their farm property by hiring an auction company? My wife and I are trying to decide whether to do a "for sale by owner" by using flat fee real estate service or an auction company.

From what I've read auctions are getting popular for selling real estate in this crazy economy. We're trying to learn the pros and cons.

thanks in advance!!

 

[Cat_Driver]

Auction companies are bandits. They get money from you and from the buyer so they make out , well like a bandit.

Spend time marketing the farm on your own, and I mean REALLY marketing it. Papers, trade magazine, posters in stores and shops, craigslist, here,.

Investors are starting to get back in the market with suck low interest rates.

Last resort you can call the bandits, BUT some will not allow you to put a reserve on the farm - could you sell the farm for 10K? Now if your reserve is too high then the bidding may never reach the reserve and you get hit for all the auction fees any way.

 

[blueriver]

Catdriver ... you need to educate yourself before you post ... Just like equipment not all things are the same. I have used auctions for my own Real Estate and Personal Property. An auction is an excellent marketing tool NOT all auctioneers and auction comanies are the same.

 

[Slimpickens]

Thanks for the replies.... interesting comments as always.

 

[charlz]

The bigger the selling price the bigger the bigger the $$$ for the auction company so they will try to drive it up as much as possible. I have attended a few auctions for the personal estate where they were also selling the real estate, all had minimum bids and a reserve or an 'owner confirmation' on the property.

How big is your place? Is it something the could or would be divided up? One of the auctions I went to was for 160 acres of mountain property with a cabin. They had it divided up into 4 pieces. They went through each piece individually and bid it up until bidding stopped. They then went though combination, A+B, C+D, A+C and so on to see who wanted to bid on multiple pieces. Then who wants to bid on all together, then back through the individual properties and then the combination's people actually bid on (now need to exceed the new individual prices combined). This went on for a long time. It was obviously designed to get the overall price for the place as high as possible and seemed to work pretty well.

 

[Slimpickens]

Hey Charlz

To answer your question, its 50 acres (17pasture/33 hardwoods and pines) with a 2bd/2ba cabin and horse barn.

I don't know if it can be divided logically. It's secluded with one way in and out of the property.

So, what if the property does not sell? I assume I would have to pay the auction company something......


thanks for the reply

 

[BillBeyer]

The last 3 properties I bought and sold were done with out any real estate company involvement. All for sale by owner. All I had was a competent closing attorney and he handled everything. I went to a property auction that a friend of mine was having. He turned down the high bid and had to pay 10 percent of that bid to the auction company. :confused2:

 

[Slimpickens]

BillBeyer

Thanks for the reply. Curious, did you use a "flat fee" realtor to advertise in the MLS? Or did you do all advertising totally on your own?

 

[BillBeyer]

No realtor assistance at all. Just my lawyer. Advertised in paper and put out my own signs For Sale by Owner. Had one realtor call wanting to list it for me, said no thanks. Then she wanted to know if I would pay her a commission if she sold it. I said as long as I got my price I did not care how much over that she got.

 

[brin]

Just as a side note...If you do not have to sell right now...then don't ! and try not to let your emotions control your decision to sell. Real estate is just like the stock market or any commondity..it ebbs and flows and has its highs and lows. No doubt about it we are near, not at a bottom yet but nearing one , I hope so just in my opinion if you do not have to sell then wait until this real estate market comes back.

There will be pent up demand and when it lets loose I would think land prices will rocket and you will look back and kick yourself for selling at the market low.

But if you just have to sell, as another poster said all autioneers are not bad guys. Like anything else shop around and remember you are th client and everything is negotiable..If you let them know you are anxious they well may take advantage of you so keep your poker face on..Good Luck.

 

[dodge man]

I don't know what real estate prices are in your area, but around here, they really haven't fallen very much.

I am a land surveyor, and have on occasion surveyed parcels to split them up for auction companies. I've probably done this 6 or 7 times, and when I heard what the ground went for, it always seemed like top dollar to me. This was usually tillable ground, but sometimes there were homes also.

I had a co-worker win the bid on a house in a small town near here. His bid was quite a bit below what the place was worth, so it ended up being a no sale. I don't know what the people had to pay the auction company, if anything. As a rule I think the auction companies usually get pretty good dollar for a place, but you never know.

 

[blueriver]

In my area ... Real Estate Auctions are as follows ... seller has the right to sell with a reserve or absolute. Either way the seller pays the advertising generally 1-2% of the value, with a reserve the auction company has a no-sale fee of $1500. Commission is 6-10% depending on the value ... only payable if the final bid is the selling bid.

Equipment or personal property runs from 10% to 25% depending upon what is being sold with the seller paying the advertising.

 

[charlz]

The last 3 properties I bought and sold were done with out any real estate company involvement. All for sale by owner. All I had was a competent closing attorney and he handled everything.

The first house I ever bought was FSBO. The key is really the real estate contract, which is what the Realtor helps with after advertising and bringing the two parties together. I imagine this is what your attorney helped with. I purchased a standard real estate contract and used that. Once you have the contract the Title Company handles the rest.

With things like Craigslist making advertising easier (and free) I have to wonder if FSBO won't become more common?

 

[YanmarFever]

Who says you have to hire an auctioneer ?
Just have the auction & YOU be the auctioneer, the heck with paying fees, just do it yourself and pocket the dough !

Have an attorney handle the paper work with the high bidder.

quick & clean..... cheap too !:thumbsup:

 

[Slimpickens]

Thanks for all the replies. I decided to try selling on my own for awhile. Anyone wanting to move to N. Georgia on 50 acres with nice cabin and very close to Lake Hartwell, shoot me a PM.

 

[NorTracNY]

charlz touched on a VERY important point. Realtors "help" with the real estate contract. Note that it's a CONTRACT and they are not attorneys. I would highly recommend not signing the document until you have your attorney look at it. I would suggest having a good attorney (if there is such a thing) if there is anything unusual about the sale. There is a box on the standard contracts about lawyer approval. Our attorney let us know that they cannot change a contract that you sign. They can only deal with wording that might not be clear.

 

[Larry Caldwell]

Hey Charlz

To answer your question, its 50 acres (17pasture/33 hardwoods and pines) with a 2bd/2ba cabin and horse barn.

I don't know if it can be divided logically. It's secluded with one way in and out of the property.

So, what if the property does not sell? I assume I would have to pay the auction company something......


thanks for the reply

1) Get the timber appraised. You might be surprised. Contact a consulting forester. The timber might be worth more than the ground it grows on. The market is down right now, so the appraisal will be rock bottom. It could be worth several times that much 5 years down the road, which might be a great selling point.

2) Farm ground has gone up remarkably in price the last few years. Is any of that land farmable, or is it just rocks? If it's farmable, you might get more out of the ag market than the housing market.

Most realtors have their heads stuck in the housing market and don't understand rural property. The last place I sold I contacted a realtor, but I didn't like his suggested sale price. I walked next door and sold it to a neighbor for twice the realtor's appraisal.

 

[Slimpickens]

Excellent advice and "food for thought"! Yes it is farmable. We've even thought about leasing or raising some cattle to sell. Trying to be creative.....