We’ve held (and been told) that the “seller confirmation” fanatics support holding auctions of this type in case the property doesn’t demand market value. We would suggest, on the contrary, that if the auction is adequately marketed, the result from the auction should be [literally] market value.
Auctioneers routinely tell me that property is only worth what someone is willing to pay for it, and so if the high bid is $471,800, is the property worth $471,800? If the high bid is $176,200 is the property worth $176,200? If the high bid is $431,250 is the property worth $431,250?
If you disbelievers are selling $100 bills at auction, is there any real risk they will sell for any material amount less than $100? There’s not. So, your right to accept or reject is needed because? Maybe the reason you worry is you haven’t adequately marketed the property?
Or possibly your seller thinks his or her [new] $100 bills are worth $120? $300? $1,000? Then we ask why are you holding this auction with unreasonable seller expectations? Most auctioneers turn away these types of sellers.
We’ve written numerous times about this $100 bill example from an auctioneer who sold nearly 5,000 real properties at auction (https://mikebrandlyauctioneer.wordpress.com/2018/03/12/what-drives-bidders-to-an-auction/) — so maybe she knew something you don’t? We certainly took her advice and sold thousands ourselves.
You still don’t see it? Try selling more real property at auction and I’m a touch optimistic you might. If you are worried here in 2024 about a road outage, construction, flat tire, snow storms … have your auction online where the only real risk is a network outage — and that’s somewhat manageable.
Maybe the lesson (which most learned in auction school) is this: It’s not that it sold for less than it’s worth, and rather that it was thought to be worth more than it sold for: https://mikebrandlyauctioneer.wordpress.com/2020/02/25/it-is-not-worth-what-it-wont-sell-for/. Of course, this is valid if there is adequate marketing.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auction Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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