-...
Need to sell ? An Auction brings multiple offers, with fast closings, and the timing and the conditions are controlled by you...the seller.
We know how to generate the right kind of activity for an Auction listing as we put all our properties on 25 different websites virtually overnight, and our office has huge walking traffic directly on The Long Wharf in Sag Harbor, which is in the exact middle of The Hamptons. Simon Harrison's experience with auctions started in 1990...and includes vast experience with foreclosures, bankruptcies, short sales as well as all manner of motivated sellers...banks, lending institutions, and government agencies.
PRICING- Because of high inventory levels, the current market has proven that shopping for bids with a higher asking price is less effective than a bottom-up approach. Like the right end of a magnet, a low price attracts all kinds of buyers, whereas a higher asking price repels buyers. A bottom-up price, or reserve, is set low to attract all kinds of buyers, and bids rise above that instead of buyers offering below an asking price, often with a guess at what you'll take, not what it's worth. With an upset price, the acceptable short sale figure, or the minimum set by the seller(s); It's faster and gets the most action in the shortest amount of time. The winning bid usually represents a net to the seller, less the cost of an attorney that closes the deal.
CLOSING- The framework for an auction usually involves a non-refundable deposit set at 10% of the minimum bid, and a no contingency contract is signed within 48 hours. Each situation could be different, but they usually close 30 days after Gavel Bid. What's comforting for sellers is the next highest bidders are asked to remain available to back up the deal. What's comforting for all potential buyers is the next highest bidders show that their bids are not guesses. For example, recently a house was offered with a 600 minimum had 15 buyers at 650 and below, and quickly the bidding went past them and there were four different buyers at 750 or above, and two buyers at 800 and above and it sold for 820. Bidding lasted minutes, and the second and third bidders remain in place as back-up.
COSTS- In order to accomodate a variety of institutional sales, Real Estate Auctions generally have a premium paid by the buyer directly to us as brokers when the contract is signed with 10% of the minimum bid going to the lawyer holding the contract. This premium is slightly less than a standard brokerage commission, which is 6%, and is determined by the winning bid. All cooperating Brokers are invited to participate by registering their customers beforehand, and they are compensated at closing. For example, if a house is auctioned with a minimum bid of 500,000 and sells for 700,000 then the buyer brings a certified check for 50,000 made out to himself, which goes to the lawyer holding the contracts, then within 48 hours he pays the buyer's premium, (6% of 700,000 = $42,000) to the firm conducting the auction. In approx 30 days from winning Gavel Bid, the buyer closes the deal by bringing the balance of $650,000...the same way a traditional transaction closes, except faster.
HOMEWORK- Sellers are asked to prepare their contracts and their closing documents including a Certificate of Occupancy, a title search, and other documents beforehand. Buyers are encouraged to do their due diligence on a property before the actual auction, because the deposit would be at risk if a buyer does not close. We often call them "as-is, where is" sales, even if we provide full information on a property. If a buyer does not close, the deposit goes to the seller as damages, and the deal is offered to the next in line.
FINANCING- Most real estate auctions do not have provisions for financing approvals, or the delays sometimes associated with them, but we know mortgage brokers as well as private financiers that can qualify buyers, and can set up financing in advance at no charge.
LAWYERS- We are licensed as real estate brokers and agents, and we are not attorneys. Before signing any legal form, you should consult an attorney.
(631) 725-4357 (917) 822-6652 Fax # 899-3998
...directly on The Long Wharf
in Sag Harbor, NY, 11963
