Multi-Parcel Land Auctions and Puppies

My Favorite Auctions…

I hope that if a person spends five minutes with me they walk away knowing I have a passion for auctions. My favorite auctions  are Multi-Parcel Land Auctions. Multi-Parcel auctions  offer large tracts of land in smaller tracts, typically a farm or ranch. These auctions allow bidders to bid on the smaller tracts individually or any combination of those tracts including the entire offering and everyone competes against each other. Multi-parcel auctions are the most complicated but to me the most exciting because of the hyper-competition they create.

A successful Multi-Parcel typically takes 60-90 days of preparation by our entire auction staff. We literally have the marketing timeline on special software to make certain we hit all the marks to assure success. Then on auction day all of our hard work gets graded by the marketplace. As the auctioneer in a Multi-parcel it is important to know the buyers, their motivations, their desires and their plans. Our bid assistants do most of the work, they make me look good while I feel like the ringmaster under a big top. When the bidding is done and I slam the gavel down on a multi-million dollar real estate auction I know I am doing what God made me to do. These auctions incorporate my love of the land and the free market expressed through auctions and I am like a little kid with a shiny new toy in a sandbox. Land auctions are my drug of choice.

I Hate (selling) Puppies…

A few years ago our family had a female Rottweiler and an opportunistic male Australian Shepard. We looked up one day and the Rottweiler had given birth, not to a litter, but a herd of puppies…14 to be exact!!

puppies and auctionWhat does one do with 14 mutt puppies you ask? Anything they can. Four died within days of birth, which gave some relief. We sold as many as we could, gave as many away as we could and still had two males left. Needless to say we had run out of friends. It was like we were peddling Amway to everyone we came in contact with. Friends stopped going to church for fear we would put a puppy in their truck during Sunday School.

Every good auctioneer has a plan. Luckily at about the 8 week mark we had a large business liquidation auction coming up. We took the two puppies, had the kids carry them around and announced we would sell them at 12 Noon and donate the funds to the local no-kill shelter. Sounds like a great plan, right?

I started auctioning the first pup and things began to fall apart. He was staring me down with, you guessed it, puppy dog eyes. Here I was the only adult human male figure he had ever known and I was selling him off to the highest bidder. I gotta tell you, I felt as low as a snakes belly when I called that pup sold. If memory serves correctly he brought $500 or $600. A very large man with a full white beard was the high bidder and I have no doubt they made a great pair. The second pup brought considerably less, I think $100-$200. When I called it sold I saw the err of my ways. Let’s just say this buyer did not seem as loving as the first buyer. I fear he had big plans for that dog and to this day I still cringe when I think about it.

After the pup auction, I turned to Ashley and said “I’ll never sell another dog at auction as long as I live”. I have since made the exception of selling older puppies at benefit auctions like Ducks Unlimited and NRA. With that one exception, I will buckle up and own too many dogs myself before I sell another puppy at auction.

When people ask what is the oddest thing I have ever sold I struggle to come up with an answer, there have been several. But the hardest lots I ever sold had wagging tails and puppy dog breathe.

~Brent

Auctions Eliminate Holding Costs and Overpricing

overpricing costs youThe market always has the right answer; you just need to know how to ask the right question. Auction?

This past April a friend contacted me about selling his 100-acre horse ranch. He and his wife were going through a divorce and the court was appointing a receiver to sell the property. The auction method was a perfect solution – achieving market value and reducing holding costs and time. Time was important because each party was responsible for this property as well as their own, separate household. Reducing the marketing time would increase their net from the property and complete the divorce proceedings.

As we do with all real estate auction properties we conducted a thorough price expectation evaluation. After completing our evaluation, we set an auction expectation of $700,000 to $800,000. The estimated expectation did not set well with either party as they wanted over $1,000,000. The couple’s expectation of price was one of the few areas of agreement. Enter the traditional broker with a suggested list price of well over $1,000,000. Husband and wife, eager for the highest return agree that the broker should list the property and thus the broker was appointed the receiver and ordered to sell the property.

Several price decreases and 10 months later the property closed! Sales price? A whopping 54% of the original list price! Originally listed for $1.2 million the property closed for $650,000, much to the disappointment of both husband and wife. I wonder how the parties would have taken it last May if the broker said “I’m going to list it for $1.2 Million but I’m going to actually sell it for $650,000.” I reckon the auction method would have been a much more acceptable option.

Overpricing is bad for the real estate professional.

The practice of overpricing by this broker to get the listing cost this couple an easy $100,000 in additional and unnecessary holding costs and sale expenses. Auctions are truth serums. As experienced real estate auctioneers, we know that our papers will be graded by the market within 60 days of discussing price expectations with the sellers. Our rigorous method of evaluating price is time tested and proven. However, it is not always welcomed news for sellers to hear.

The professional real estate industry will continue to suffer until we, as an industry, deter the practice of overpricing. What if sellers told listing agents “If my property sells for 85% or less of your suggested price I don’t pay you any commission”? I suspect we would stop pulling list prices out of the clouds and get a bit closer to market value.

We at Alliance Auctioneers will give you an honest assessment of your property – every time. We will get up every day and keep working to change the perception of the oldest, most proven marketing method on earth. Auctions work!