Real Estate Is One of the Fastest
Growing Auction Areas

According to the National Association of REALTORS® (NAR), "the value of residential and commercial properties at auctions climbed from $49.5 billion to $58.5 billion between 1998 and 2002." The NAR estimates that by the year 2010, 30% of all real estate transactions will be auctions.

The latest statistics by the National Auctioneers Association in Overland Park, Kan., report that growth in the auction industry has increasingly come from residential real estate auctions, which grew by 4.5 percent in the third quarter of 2006 and generated $16 billion in sales last year, up 12.5 percent over 2005.

A real estate auction is an innovative and effective method of selling real estate, benefitting both buyers and sellers. Buyers come prepared to buy, knowing the seller is committed to sell. Disposal of the property is quick, reducing long-term carrying costs, including insurance and maintenance. The seller knows exactly when the property will sell, eliminating numerous and unscheduled showings. Potential buyers are pre-qualified for financing, and compete fairly and on the same terms as all other buyers to determine the purchase price of the property.

Realtors can reap the benefit of auctions as well. Agents can earn commissions as referring agent/broker, cooperating agent/broker or as listing agent/broker. The auction method of real estate marketing develops a market niche for the realtor, increasing revenue and market share.

More and more, realtors are seeing auctions as offering sellers an advantage in the current transitional housing market. The auction method is a valuable tool for the agent who wants to offer clients and customers new selling and purchasing options. Auction marketing generates a list of ready, qualified buyers, exposes the property to many potential purchasers, and insures that the property sells at true market value. Successful auctions bring people in to look at all an agent's listings, not just the auction listing, resulting in referrals and return business.

NAR President Thomas M. Stevens of Vienna, Virginia, said, “Auctions should be seen as part of an array of services Realtors® offer to their customers and should not be seen as competition to the existing range of services provided by a traditional brokerage. Auctions keep Realtors® at the center of the real estate transaction.”