Real Estate Auctions: Rapidly Growing and Sometimes Misunderstood in Northeastern Ohio!

By: Tony Viola. President of Realty Corp of America --- While selling personal property and real estate at auction is widely accepted in many communities throughout Ohio, Real Estate and personal property auctions have been less prevalent in the Greater Cleveland area until recently. Since 2007, when Realty Corporation of America's Auction Services became licensed, our company has gained significant knowledge and learned a great deal about how to successfully introduce the auction method of selling Real Estate and personal property while educating members of the public about auctions. In this article, we will share some of our ideas and insights.OverviewAt recent auctions conducted by Realty Corporation of America, the vast majority of buyers and bidders had never been to an auction before. Therefore, most members of the audience were unfamiliar with key terms such as buyers premium, reserve auction, chattels, ticket runners, clerks, cashiers and the Auction Recovery Fund. We believe that it is a duty of licensees as well as a good business practice to make sure that bidders are comfortable with all aspects of the auction format. Since auctioneers generally represent the seller, it is in the sellers interests to make sure that bidders are comfortable buying at auctions. In our experience, if a buyer is not comfortable with the auction format or has not has sufficient opportunity to preview real estate being auctioned, sellers tend to receive lower proceeds. Therefore, while many auctioneers don't recommend on-going open houses before the date of a real estate auction, our company has found that making a property available for inspection puts buyers at ease. We even commission a comprehensive property information report on each home we are selling to improve disclosure and give buyers full and complete information. We believe that buyers are more confident that they know what they are buying and, in the case of distressed real estate, they have a better understanding of the cost of renovations. In addition to the foregoing, many different business models are being attempted as auctions are more widely accepted in greater Cleveland. Some firms charge a larger buyers premium and do not charge seller commissions. At our company, we employ a unique sliding scale commission structure. We provide the seller our best estimate of a range of outcomes and charge a lower fee if the selling price it at the lower end of the range. This technique has allowed us to convince sellers that we are genuinely working in their interest to maximize their dollars received. Realty Corp has made it a point to convince sellers that the auction method of selling real estate coupled with an aggressive marketing campaign delivers fair market value for real estate. While many auctioneers prefer to conduct absolute real estate auctions, challenging market conditions and reductions in real estate valuations mean that many sellers are simply unable to contract for an absolute real estate auction.Auction Day AnnouncementsExplaining the terms of the auction and providing a narrative of the property's highlights is critically important. At Realty Corp. we have at least two licensed auctioneers at each real estate auction. One auctioneer provides an example of the bidding process to familiarize the audience with bid calling process and to create excitement for the auction while the other calls the auction. It is vitally important that buyers understand how to bid and are comfortable with the auction rules and format. Prior to the bidding process, auction assistants circulate among the bidders to answer questions and later encourage participation and relay bids to the auctioneer. During the auction, the value of the property is reinforced as potential bidders compete to purchase the propertyWe encourage buyers to be pre-qualified for a mortgage prior to the auction. By offering mortgage services to those who are interested, we encourage additional bidders or facilitate more aggressive bidding than may otherwise occur. Following the sale of the property, auction company personnel immediately meet the winning bidder to sign the purchase contract, property and agency disclosures, collect the down payment, and arrange for the closing, typically within 30 days.ChallengesFinally, the Auction Method of selling Real Estate is more successful when important issues are addressed in advance. Specifically:Communities with point of sales laws require a property inspection prior to title transfer. We strongly suggest making sure sellers order required inspections in advance of the auction.Given the current Real Estate Market, we suggest that sellers provide loan payoff information up front so reserves can be established if the property cannot be conducted as an absolute auction. Many sellers are unsure of exactly how much they owe on their property, many loans have pre-payment penalties and some sellers have other mortgages or other obligation that are tied to their property. The savvy auctioneer has a full title examination conducted prior to the auction to avoid trouble later.Finally, we suggest that sellers and the auction team be clear about the marketing campaign being conducted. Realty Corporation of America identifies all marketing initiatives (newspaper advertisements, direct mail, signage, open houses, media advertising, etc.) as part of our proposal so that the client has reasonable expectations about what promotional campaigning they can expect.In closing, Auctions are gaining in popularity in greater Cleveland and Northeast Ohio. We expect continued growth and welcome suggestions from our colleagues in the Auction Business as we promote the auction method of selling Real Estate and personal property. ###

Fun but Mediocre Events -- Everyone is Welcome!

Our new President is leading America in a new direction! The Browns hired a new coach so we suck less next year! Cleveland is building a Medical Mart to bring new jobs to the City! With all of this change we can believe in, I think it's really important that some of us remain committed to the same old tired nonsense! Why get better, grow, change or improve when we can just do the same stupid stuff over and over? In that spirit, I'm pleased to invite you to another Mediocre Bar Night! Oh Yeah, the same dumb social activity we thought up in Collinwood ten years ago! Just remember our motto: LOWER YOUR STANDARDS, INCREASE YOUR HAPPINESS! Please join us Tuesday Feb 17th at 6:30 at the Colony in Cleveland Heights! We're having Onion Rings and French Fries for dinner and the Old Milwaukee Light will be flowing! Let's be honest: this gig is gonna suck! Be sure to wear your worst jeans, use that green eyeshade you NEVER should have bought and bring a date you don't like that much -- or maybe recycle an old flame you dumped a while back! Whatever you do, don't miss the Mediocrity! While my social events may be mediocre, I have cool friends that come up with exciting events! Please join us at Lavish, tour the salon and learn more about the Number One Super Food in the World: The Acai Berry! Yes, this unique nutritional drink is changing lives and making America healthy! Save the date: Monday, February 9th at 4854 Richmond Road, near I 480, starting around 7:00! To learn more, visit www.monavie.com or call the Beautiful & Terrific Jen Watts at (440) 376-9814! I know no one has any plans on a Monday in February in Cleveland so we expect full attendance! Weak Excuses (I'm tired, I forgot, I can't go, I have to go to bed early, I already went out this past weekend, etc.) will not be accepted! As always, everyone is welcome so bring a friend, bring a date, bring a cousin, bring a dog -- just be sure to join the fun! See you soon! Tony Viola - Realty Corporation of America - 216-214-4665 - tony@realtycorpofamerica.com