Auction or Real Estate Listing?
Which should you choose in 2010?
Be informed of your options when selling your Lancaster County property. Many people simply sell by auction because they are unaware of alternatives. Often older residents choose the auction method because it is what they have known all their lives. Auctions are often a good route to sell properties but listing your home or farm via real estate should be considered as well. It is always wise to consider your options.
The Lancaster Real Estate Market is changing. Before 1930 auction was one of the only ways to sell your property publically. Nowadays, many more properties are sold via Real Estate Listing than over the auction block.
Auctions are a great way to sell when you must sell quickly and they offer a quick route to turning parcels into cash.
Auctions measure the value of a property by drawing bids from potential buyers gathered at a sales event. This gives qualified buyers equal chance to buy the property. Auctions usually cost less commission than real estate listings as well.
When an auction event does not yield an acceptable highest bid for the seller, a fee is still owed to the auctioneer often for the sale event, advertising and other charges.
In 2008 many of Jim\'s listings sold for full asking price. With Listing a home, the seller can exercise more control over the final sales price - if the property does not sell at a price acceptable to the seller on real estate listing the seller owes nothing.
Auction savvy buyers tend to originate in an "auction culture" specifically farm sales or rural related properties. Such sales fail to mobilize the largest segment of buyers. Exposure to a wider cross section of potential buyer will elicit higher offers. Auctions alienate many well heeled buyers who will never consider the perceived hazards of the auction venue.
It can be said that auctions can work for any real estate but best serve larger operating farms or properties, the purchase of which assumes some liability or whose prospective buyers are largely comfortable with the venue and risk.
Below is a cross section of comparative sales: Listed and Auction
The property below was sold via auction in April of 2008 in Rapho Township for $432,000. It is a rancher on a 5 acre parcel offering beauty in a nice "setback". Some auctions are resounding success stories for sellers and create a local buzz for months afterward. Comparables pointed to an actual value ten of thousands less. 2009 has its own example or two; but there are many more that fell short.
The property below is an example of home that brought and excellent price at auction and an even higher price when listed through Real Estate listing shortly thereafter.
The property above on 2128 Hilltop Rd in Manheim was purchased at auction in 2006 for $470,000 and in 2008 was listed on the Real Estate MLS. It sold for $550,000. Property values did not rise at all during that time.
The best example lies in a property that was sold at auction and then listed and sold for $50,000 more the next month
3278 North Colebrook Road, Manheim is a 4 acre farmette with a 1434 square foot updated farm house, 3 Bedroom, 2 Bath, Attached Workshop, Barn and 2 car garage surround by farm land.
It was SOLD AT AUCTION $192,000 in the summer of 2004 and Sold again $240,000 OVER 98% of LISTED PRICE.
Buying at Auction made this buyer $50,000 but it could be said it cost the seller some proceeds as well. Sometimes, with risk comes reward to either buyer or seller.
Conclusion: Auctions are an excellent way to sell some properties; selling them at an appointed time and gaining high interest levels and sometimes outstanding prices with respect to the appraised value. Depending on the objectives and the mindset of the seller (especially risk averse sellers) Real Estate Listing can offer a measured sales option that offers increased control to all parties and excellent purchase availability to a wide market.
This article is not intended to endorse either venue as a total solution for real estate sales
