Sage Auction Blog

RED FLAGS

I do a lot of training with, new to the business, auctioneers. Most are excited about being in this new profession and approach it as a real estate agent would approach booking new listing. Problem is, in this business we are all about selling and not about obtaining new listing. I have a complete section in my Real estate Boot camp on qualifying sellers.

Additionally, I put together a, sort of down and dirty, way to determine if in fact we can be of any help to a particular seller.  You see, I'm not in this business to see how many listing I can book, or conducting auctions that I know we have no hope of selling or spending tons of my clients money just to see my company's name in the newspaper.  I'm in this business to help people solve a particular problem AND I know that for 75% of some people (residential sellers) I won't be the right choice, and for 95% of other people (Ag land sellers) I'll be their best choice.  Anyway, here's my list.

BANKS MANAGE RISK ?

Everyone knows by now that we are in a housing “correction” to put it nicely. The price of homes has been in a free fall for the last twelve months (at least) and the market for new home construction is, well, ugly. The largest builder in Iowa closed its doors a few weeks ago and told its employees to go home. And it had over 200 homes in various stages of construction.

In a recent meeting I had with a senior banker he indicated that his bank did in fact have  foreclosure inventory on the books and would have more. But the Polk County Sheriff’s office was backed up four months due to the high volume of properties going to sheriff sales. WOW that is saying something especially for a conservative (financially) state like Iowa.

The Puzzle

A few days ago I had an email conversation with one of my students from the last session at auction college. I asked him what he thought was the most important component of a real estate auction. I had a pretty good idea what his answer might be, as I’ve asked the same question to many new graduates and usually get very similar answers.

He said, “If I had to choose two of the most important it would be marketing to the correct buyers to get them there and then connecting with them on sale day”. 

The reason I ask recent auctioneering graduates this question is that most are very excited about the opportunity to get in front of a crowd and “do their thing”. Therefore, they usually answer something or another about being a good and effective bid caller, etc. However, this student's thoughtful answer demonstrated some insight into the business side of real estate auctions. Here’s the parts to the puzzle as I see them and through working with many other very successful auctioneers over the years.