Why would someone sell Real Estate at auction instead of pricing it?
Auctions are fast, efficient and produce fair market value. When a property is "priced" it is either underpriced or overpriced. Either way, the seller loses. If the price is too low, it sells quickly but equity was lost. If the price is too high, the property does not sell. It then has to be advertised again at a lower price or negotiated through negative haggling with one person at a time. The auction creates a sense of urgency. All serious people are brought together to compete. The seller is assured of fair market and so is the buyer that obtains the item at one bid over the next interested person.

Can I sell my real estate at auction?
Yes, we would be pleased to consult with you about the sale of your property. Please contact us if we can be of service.

Are there different kinds of real estate auctions?
Yes, auctions can be Absolute, Subject to Confirmation, with Reserve, or with a Stated Minimum.

What does Absolute Auction mean?
A property that is sold at Absolute Auction means that it is selling to the highest registered bidder regardless of price. There is no minimum and the seller cannot reject the highest bid attained at the auction.

What does Subject to Confirmation mean?
It means that the property is being offered to the highest bidder subject to the seller accepting or rejecting the bid. Most Furlo Auction Service auctions are offered subject to seller confirmation.

What is a Reserve Auction?
It is similar to the subject to confirmation auction, except there is an undisclosed reserve dollar amount set by the seller. The property cannot be sold unless the bidding meets or exceeds the reserve.

What is a Stated Minimum bid auction?
An auction where the Seller announces the reserve or minimum bid and generally will sell the property absolute at or above the stated minimum. Example: This property shall sell at absolute auction at or above a minimum of $41,237. If any one bids the stated amount or more the property will sell.

If a seller has a reserve, why don't they tell us the reserve, instead of wasting our time?
Furlo Auction Service is only interested in representing motivated sellers. It is not a waste of time to go to subject to confirmation or reserve auctions. Motivated sellers usually set their reserve based on their belief of the true market value. However, by not printing a stated minimum, they have the flexibility to lower their reserve and accept true market value on the day of auction. Example: A Seller sets a reserve of $100,000 on his home because his neighbor's sold for $110,000. On the day of the auction he witnesses 25 registered bidders compete to drive the bidding to $96,600. No one is willing to pay $96,700. The Seller has purchased another home and does not need the one he is auctioning. Today is the day and he opts to accept $96,600.
What would have happened had he printed Minimum Bid $100,000?
No one would have come to the auction, and he would not have had the opportunity to review the top offers. Perhaps his neighbors house was larger, had more features, etc
 

Where does the bidding start?
Anywhere the auction audience wants to start it. An auctioneer might ask for $100,000. to start. If no one bids he will drop the asking increment until someone starts. The property might start at $25,000 and soar to $400,000 or end at $50,000 based on market value.

What is a Buyers Premium?
A Buyers Premium is that portion of the commission paid by the buyer. The Buyers Premium is added to the bid to become part of the total sale price. Furlo Auction Service has a 10% Buyer Premium and some times even less. Each auction will vary.

What is a Bid Contract?
The successful bidder is required to sign a Bid Contract at the conclusion of the bidding. The contract has the description of the property that he bid on, the bid, the Buyer Premium, the total with Buyer Premium. This form verifies that the bidder agrees that he is the high bidder.

When and where does the Closing take place?
Furlo Auction Service recommends 45 days for closing. However, some sellers opt for 30 or 45 day closings for their auctions. The closing is usually at a title office or at the office of the lending institution.

Is the Closing different than any other real estate Closing?
No, the closing is the same. The main difference between private treaty selling and the auction is how the price is arrived at. Once the auction is over, the Buyer and Seller get together and arrange for the closing in the customary manner.

What happens if the high bidder fails to close?
We have over a 99% closing success rate. In the event a high bidder forfeits the bid, Furlo Auction Service immediately notifies the backup bidder in order to secure a new Purchase & Sale Agreement. If not taken, the property is made available to other registered bidders and the open market and the high bidder forfeits their deposit.

What is fair market value?
Fair market value is the price for which a property will sell on the open market between a willing buyer and a willing seller, neither being under compulsion to buy or sell as of a specific date. Generally, it is the price that a property will fetch at a well-advertised auction. Factors that come into consideration are location, age, condition, quality, size and desirability. Auctions are the last niche of the free enterprise system where the laws of supply and demand prevail.

Is it possible to get a bargain at auction?
Absolutely. However, keep in mind a "bargain" is like "beauty".  It is in the mind of the beholder. One person might say, "That guy is nuts to pay $800,000 for that big chunk of ground." While the buyer is thinking, "I just got a bargain at $800,000. I'm going to subdivide and develop for a nice profit". You can get great value buying at just one bid over the next interested party. But, don't be fooled by those late night television shows that promise that you can make a million dollars buying property dirt-cheap. It might be possible to buy a skyscraper for $1, but you must have it torn down and removed by the end of the week!

Have you calculated your holding cost on Real Estate lately?

Taxes (non-homesteaded), Insurance, Energy Cost (electricity, gas), associated Mortgage cost (principal, interest), maintenance cost, depreciation.  Michigan Real Estate Association has calculated this to be approximately 18% of the value of the house per year.   

If you held a $200,000.00 home for 1 year at the end of that year you would have lost $36,000.00 in investment revenue, hold the same home for 2 years and you would lose $72,000.00 of investment revenue.  The average home in the State of Michigan will sale in approximately 18 months on the market, after the Seller has finally dropped his/her value to a “Fair Market Value”

  CALL FURLO AUCTION SERVICE TODAY
     SO THAT WE CAN EXPLAIN ALL THE DETAILS ON SELLING REAL ESTATE AT AUCTION.