How To Profit From Real Estate Auctions

By
July 13, 2020

Brokers & Agents can use auction to increase their market share & revenue.

By adopting an auction program YOU the Broker/Agent have the advantage of standing out from your competition. Not only will you have the upper hand in selling specialty listings but you will have a backup plan for hard to sell/ expiring listings. Auctions are a valuable tool in any market.  Our goal is to educate and team up with brokers to help you obtain more listings and sell more property utilizing the auction method of marketing. We here at Prestige have positioned our company to be YOUR advocate.  We are here to service you the Broker and add another Tool in Your Toolbox. 

 In this article, we will cover how you can get involved with auctions and use them to you and your client's advantage. 


We encourage you to attend one of our CE Classes or online webinars to become an auction specialist. 

 

OPTION A: Brokers/Agents can refer clients

A real estate agent or broker can refer a seller to an auction company and receive a referral fee. The referring agent or broker may also be instrumental in helping the seller understand the many benefits of the auction process and help them in making an informed decision.

Responsibilities of Referring Agent/Broker:

  • Help the seller analyze his needs, the property, and the market to determine if it is a good auction situation.
  • Refer seller to professional real estate Auction Company.
  • If a listing agreement exists- typically you will cancel the listing and the auction company will take an “auction-listing contract” and sign an agreement with you the broker/agent to collect a referral fee.
  • Send notice to MLS stating that the property will be sold at auction and direct them to the auction company.
  • Collect referral fee from auction company when the property closes- thought a title company

 

OPTION B: Become a Co-Broker

Most auction companies do not work on a co-broker basis however Prestige Real Estate Auction encourages co-broker situations.  Our goal is to create a working relationship with you the broker/agent and help you become an auction expert- creating a niche within your business.

In a co-broker situation, the auction company handles the majority of the auction process allowing you to focus on your real estate business and the auction company to focus on the details of the auction.

The co-broker is involved in the process and can benefit by being included in the marketing- getting your name out in front of the public.  Also, by working as a co-broker you have the opportunity to work with the unsuccessful bidders and the buyers that may be interested in another property type or location- helping you create a strong buyer’s list.

Responsibilities of Co-Broker/Agent

Before the Auction

  • Provide the lead (in most cases).
  • If a negotiated sale listing agreement exists- typically you will cancel the listing and the auction company will take an “auction listing contract” including you as the co-broker
  • Send notice to MLS stating that the property will be sold at public auction and direct them to the auction company.
  • Provide a fact sheet on the property.
  • Perform market analysis.
  • Complete due diligence.
  • Order and obtain signs, photographs, and keys.
  • Hold open houses and be there for any scheduled inspections.
  • Assist bidders with the pre-qualification process.
  • Provide feedback (progress reports) to the seller.

During the Auction

  • Be present for the auction- assist in greeting people
  • Assist in the registration process
  • Assist auctioneer in the bid process as needed.

After the Auction

  • Help buyers with post-auction inspections, insurance, financing, etc.
  • Assist in pre-closing events.
  • Attend closing.
  • Collect commission check when the property closes.

 

OPTION C: Be a Cooperative Buyer-Broker

A cooperating agent or broker registers a buyer who purchases property offered through an auction and earns a commission established by the auction firm. This agent or broker accompanies the bidder to pre-auction events and the auction, registers him/her to bid, and receives a portion of the commission.

Prestige auction pays equivalent commissions to the buyer broker- we value your time and encourage your participation by compensating you fairly

Responsibilities of Cooperating Agent/Broker:

Before the Auction

  • Call auction companies to be placed on their mailing lists.
  • Attend real estate auctions to learn how they work or go on-line and view on-line only auctions.
  • Advertise as an agent/broker who is knowledgeable about auctions to obtain prospects.
  • Attend pre-auction open houses with prospects.
  • Help prospects determine the market value of the property prior to sale (check comparable, property indebtedness, title, lien, and market conditions, and read the due diligence or bidders packet).
  • Learn the rules necessary to earn a commission for registering a successful buyer.
  • Learn the terms of the auction.
  • Review the Buy/Sell contract and any forms that may require your or your buyer’s signature.
  • Register bidder prior to the auction pursuant to the auction firm's requirements.  If on-line bidding only makes sure that you have registered your buyer prior to them registering and placing a bid.

During the Auction

  • Attend the auction with your buyer or be available in the on-line bidding process.
  • Help them register- make sure you have registered them as your buyer prior to them registering for the auction, this ensures you will earn a commission.
  • Assist prospect at the auction or through the on-line bidding process
  • Accompany successful bidder to contract room or if on-line walk them through the contract buy/sell

After the Auction

  • Collect commission check when the property closes (handled by title company).


We bring you years of experience and a completely streamlined method in the auction and sale of real property.  This allows you to focus on your real estate business and allows us to focus on the auction program that will compliment your listings and get them SOLD!

With Prestige, you have a dedicated auction team behind you.  By adopting an auction program, you have the advantage of standing out from your competition and creating a market niche.  As a broker, creating market share is an essential key to your success.

And we pay competitive commissions on both the buy and sell-side!

Get started today and add us as a tool in your toolbox!

Real Estate Brokers

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