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Selling At Auction







View Information on the Following Topics:
Seller's Benefits Realtor's Benefits Real Estate Auction Process
Buyers' Benefits Qualified Sellers

The Auction Method accelerates the sale of your property by generating additional consumer interest and activity. Non-contingent contracts and thirty-day settlements are required of all buyers of auctioned properties. This means a quick transaction for you.

The real estate auction process is well established, much like auctions for fine art, antiques and collectibles, and it is growing in popularity, because it works!






Seller's Benefits:



  • Real estate auctions offer the seller another option Auctions create competition among buyers. Consequently, the auction price can exceed the price of a negotiated sale.

  • An auction generates excitement and heightens buyer interest.

  • An auction creates the most exposure in the shortest period of time and accelerates sales.

  • Requires that potential buyers be registered and qualified with certified funds on the day of the auction.

  • Eliminates high seller carrying costs -- such as interest, taxes, and maintenance.

  • Auction brings interested buyers to a point of decision -- they must act now or lose an opportunity to purchase the property.

  • Auction is a true market forum.

  • A seller can plan and select the date they want to sell. They control the sales process.

  • A seller sets the terms and conditions of the sale while maintaining control of the property throughout the auction.

  • Auction eliminates numerous and unscheduled showings.

  • Auction takes the seller out of the negotiation process.

  • Auction is an aggressive, advanced marketing program that increases potential interest in and awareness of a property.

  • A Seller is able to obtain liquidity, free up capital and move on to other investments or property decisions.






Buyers' Benefits:



  • Smart investments are made because properties are purchased at fair market value.

  • The Buyer knows the seller is committed to selling the property.

  • The Buyer determines the purchase price through competitive bidding.

  • Auctions eliminate the long negotiation process.

  • The purchasing and closing dates are known.

  • The Buyer knows he is negotiating fairly and on the same terms as all other buyers while they openly compete with one another.






Realtors' Benefits:



  • An auction exposes the property to many interested people and generates a list of ready, qualified buyers.

  • Realtors potentially can see more sales with the options available by auction, instead of just listings. As a result, auctions offer your clients and customers new selling and buying options.

  • You can develop your own market niche.

  • You have the assurance that property will be sold at true market value.

  • Property is sold within a relatively short period of time. Consequently, Realtors can show their clients a guaranteed day of sale and a quick closing.

    Auctions can bring people in to look at your other listings, not just the auction listing.

  • Successful auctions result in referrals and return business for you the agent/broker.

    Auctions are simply NOW events, NOT fire sales or distress sales, and generate excitement and interest in the property.

  • There is nothing like an Auction Event to bring exposure to the property, and buyers with a sense of urgency to act.

  • There are many types of auctions, from "Absolute" to "Subject to Confirmation." We can fit the best type to suit your property.

  • Never lose another sale to contingencies. Auction buyers are pre-qualified and the high bidder's deposit is non-refundable.

  • Realtors will also have the opportunity to pre-register a buyer to bring to the auction event and be compensated at closing.

  • Commission splits are comparable or higher with the auction method so you can increase your revenue by earning commissions as a referring agent/broker, a cooperating agent/broker, or as the listing agent/broker.

  • You will have no responsibility to show the property, to take offers, negotiate, or for the cost of advertising, but still receive a commission.








Qualified Sellers


A recent article in the Wall Street Journal states, "... going to the gavel is becoming a popular option for even thriving businesses and wealthy landowners who want to get rid of property quickly. Among those increasingly turning to the auction block are burgeoning retailers who need to sell one store to make way for a new one nearby, consolidating banks with overlapping branches, and owners of valuable parcels looking to avoid taxes during protracted sales negotiations."


Well over $80 billion worth of real estate holdings were sold last year through the Auction Method of Marketing. There is no doubt that this is a method that WORKS.

Which Properties are Suitable?


Vowell Realty and Auction Company targets "qualified sellers". A qualified seller is one who is interested in selling their real estate in the short-term, owns a significant amount of equity in their real estate and one who believes in the Auction Method. We service the agricultural, commercial, estate, and residential markets, among others. The following includes characteristics that a seller may have for each of the aforementioned segments:



  • Agricultural: An auction of agricultural real estate brings an event and process directly to the location which heightens interest. Interested neighbors may desire to buy the land because of proximity to their ranch or farm. Real estate auctions create a sense of urgency which attracts prospects to act now or miss out on an opportunity of a lifetime. This sparks competitiveness amongst neighbors and other interested buyers that may want to acquire the land. In addition, the agricultural community is familiar with the auction process as much of their commodities are sold via this process. They have already benefited from auctions and understand the advantages when buying or selling.

  • Commercial: An auction of commercial property may be the most efficient and effective process to sell an owner's commercial property. An auction can usually be marketed and completed within 60 days. This allows the owner to dispose of the property quickly, resulting in less holding costs and reinvestment of assets into other ventures. An owner may have to wait for several months or even years to liquidate their property via a conventional real estate brokerage. While the clock is ticking so are the recurring property taxes, insurance and maintenance expenses for the property. Real estate auctions make sense to the seller who understands the concept that time is money.

  • Estate: An auction of estate property can eliminate an heir?s hassle and emotional distress of selling property that they acquired via inheritance. An auction also serves an impartial venue for multiple heirs to fairly participate in acquiring estate property without leaving to question the value of the property or who should rightly receive the property ? the property goes to the highest bidder. Often times receiving an inheritance can trigger significant tax consequences and an auction may be the heirs only option to quickly extract their capital from the estate in order to satisfy the liability.

  • Residential: Whether a rental, second home, or primary residence, an auction of residential property may be the best option for an owner to sell their property. Many times an owner needs to dispose of the property quickly due to another pending sale or purchase, an abrupt relocation, or to use the proceeds for some other purpose. An auction can serve as a quick method to complete a sale while establishing a competitive environment among the buyers.







The Real Estate Auction Process


  1. Evaluate the property to determine if it is suitable for real estate auction. Most properties can be sold at auction. However, not all property is suited for auction.

  2. List the property using an auction listing agreement designed for the auction method of marketing real estate. Note, this is a critical distinction.

  3. The seller selects the date the auction will be held.

  4. The real estate auctioneer develops a marketing plan.

  5. The real estate auctioneer executes the marketing plan and markets the property for 3-4 weeks which will maximize property exposure . The marketing effort is designed to create a sense of urgency that requires the buyer community to act on the sellers time schedule not theirs.

  6. Schedule a property viewing. Conduct one or two open houses that are two hours in length. This eliminates numerous and/or unscheduled showings while building a sense of urgency within the buyer community to purchase the property or lose the opportunity.

  7. Develop an auction day strategy.

  8. Conduct the auction on the day the seller chooses.
    • Register the qualified bidders by accepting their certified funds and issuing a bidder's package and bidder's number/card.

    • Sell the property to the highest bidder.

    • Execute a purchase agreement, the day of the sale, that is designed specifically for the sale of real estate at auction.

    • Collect a non-refundable 10% down payment from the successful bidder/buyer.


  9. Close the sale within thirty days using an escrow company.







National Auctioneers Association Code of Ethics and Standards of Practice:

Every Member of the National Auctioneers Association Pledges to Abide by the Following Code of Ethics and Standards of Practice:


MISSION


To promote, increase and build the trustworthiness of the competitive bidding method of marketing, including: live, Internet and sealed bid auctions, and enhance the professionalism of its practitioners.


VISION


Competitive bidding will be increasingly utilized as a method to sell all types of goods in all segments of the economy. The National Auctioneers Association (NAA) will unify and lead the competitive bidding industry to fulfill this vision.

PREAMBLE


The National Auctioneers Association is the professional organization for practicing auctioneers, their associates, affiliated businesses and other related professionals. Membership in the NAA although voluntary, carries with it a requirement of professional commitment to other professionals, clients, customers and the public at large that extends beyond that of laws and professional regulations. Members of the NAA accept this obligation to conduct themselves and their businesses in a manner that serves the public interest, protects the public trust and furthers the goals of their profession.
This Code of Ethics of the National Auctioneers Association and the accompanying Standards of Practice guides the members in the performance of their professional responsibilities and duties. While this Code may establish obligations higher than those mandated by law, in any instance where the Code and the law conflict, the obligations of the law must take precedence.

DEFINITIONS
AARE (Accredited Auctioneer, Real Estate) The professional designation awarded by the NAA Educational Institute to qualified real estate auctioneers who meet the educational and experiential requirements of the Institute.


Absentee Bid: A procedure that allows a bidder to participate in the bidding without being physically present. Absentee bids are usually handled under an established set of guidelines by the auctioneer or their representative.


Absolute Auction An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. (See Auction without Reserve).


"As Is" Property is sold without any warranty as to its condition and/or fitness for a particular purpose. Buyers are solely responsible for examining and judging the properties condition. Also known as "As Is, Where Is" and "In its Present Condition."


Auction: A method of selling property in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or sale.


Auction Listing Agreement: The contract executed by the auctioneer and the seller which authorizes the auctioneer to conduct the auction on behalf of the seller and sets out the terms of the agreement and the rights and the responsibilities of each party


Auction Subject to Confirmation: (See "Reserve Auction")


Auction With Reserve: An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed.


Auction Without Reserve: (See "Absolute Auction")


Auctioneer: The person (or firm) whom the seller engages to direct, conduct, or be responsible for a sale by auction. This person may or may not actually call or cry the auction.


Bid: A prospective buyer?s indicating or offer of a price he or she will pay to purchase property at auction. Bids are usually in increments established by the auctioneer.


Buyer's Premium: An advertised percentage of the high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.


CAI: The professional designation awarded by the NAA Educational Institute to practicing auctioneers who meet the educational and experiential standards set by the Institute.


Client: The party for whom the auctioneer sells the property; it is often synonymous with "seller."


Customer: The party who attends the auction for the purpose of buying the property offered for sale.


Graduate, Personal Property Appraiser (GPPA): The professional designation awarded by the NAA Educational Institute to qualified property appraisers who meet the educational and experiential requirements. A member holding a GPPA designation must comply with standards and requirements of the Uniform Standards of Professional Appraisal Practice.


Member: A member in good standing of the National Auctioneers Association.


Minimum Bid Auction: An auction in which the auctioneer accepts bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auction.


Reserve: The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the reserve price.


Reserve Auction: An auction in which the seller retains the right to establish a minimum price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. (Also known as "Auction with Reserve" and "Auction Subject to Confirmation")


RESPONSIBILITIES TO CLIENTS AND CUSTOMERS


ARTICLE 1.


Members pledge to protect and promote the interests of the client. This obligation of absolute fidelity to the client?s interests is primary, but does not relieve members of their obligation to treat all parties to the transaction fairly.


STANDARDS OF PRACTICE 1.1


Members must not enter into an agreement with a client to withhold information from the public that would prove to be unsafe, illegal, detrimental to the public or material to making a decision to bid.


STANDARDS OF PRACTICE 1.2


The practice of encouraging a client to market a property as "absolute" when in actuality the member has verbally promised to convert the sale to an auction with reserve, or alternatively to cancel the sale if the marketing campaign does not produce an opening bid sufficient to satisfy the intended reserve of the client, is strictly prohibited.


STANDARDS OF PRACTICE 1.3


Members must not build unreasonable expectations about the outcome of an auction in the mind of a potential client in order to secure the client?s business.


ARTICLE 2.



Members must, in conducting an auction, deal with customers in a manner exhibiting the highest standards of professionalism and respect. Members owe the customer the duties of honesty, integrity and fair dealing at all times.


STANDARD OF PRACTICE 2.1
This Article recognizes not only the legal concept of a member?s dual agency responsibility to a buyer (in addition to being the agent for the seller, the auctioneer may become the agent of the buyer at the fall of the hammer in certain situations), but also the member?s responsibility to act as a professional at all times. Members must conduct their business affairs so as to promote a positive image of their business and therefore the auction profession.


STANDARD OF PRACTICE 2.2
Members shall provide customers with a clear understanding of all the terms and conditions of the auction. Prior to the auction, customers for real estate auctions should be provided a copy of the contract to be signed. Following the auction, customers for personal property auctions should be provided a written bill of sale.


STANDARD OF PRACTICE 2.3
It is recognized that custom and practice may vary in the sale of different types of property as well as in different geographic areas. Therefore, this information may be provided in oral or written form. However, wherever possible, it is highly recommended that members communicate this information in written form or at a minimum to communicate this information orally prior to the commencement of bidding.


ARTICLE 3.


Members should, to assure better service to the seller and to prevent misunderstandings, enter into written agreements or, at a minimum, clear oral agreements that set forth the specific terms and conditions of the engagement.



STANDARD OF PRACTICE 3.1
Members have an obligation to conduct their business affairs in a professional manner. Contractual requirements are to a certain extent dependent upon the type of property being sold. However, members should develop their contract forms with this Article in mind.


STANDARD OF PRACTICE 3.2
Members should discuss all aspects of the services to be provided and include them in written form where appropriate including: duties and obligations of the parties; services provided by the member; insurance coverage relating to liability, theft and casualty loss; use of a buyer?s premium, if applicable; handling of funds received and controlled by the member; sales tax, if applicable; and form of payment by buyers. Additionally, members must provide the client with a timely, detailed written accounting of the sale, which must include information concerning the handling and timely disposition of all funds received or controlled by the member.


ARTICLE 4.


Members shall not accept compensation from any party, other than the client, even if permitted by law, without the full knowledge of all the parties to the transaction.


ARTICLE 5.


Members shall provide the highest level of competent service in those fields in which members are customarily engaged. This competency is attained by education, training, study, practice and experience. Competence also includes the wisdom to recognize the limitations of that knowledge and when to seek the counsel, assistance or client referral appropriate for the circumstances.


STANDARD OF PRACTICE 5.1
Members should not provide auction services in a careless or negligent manner, such as a series of errors that, considered individually, might not significantly affect the results, but which when considered in the aggregate would be detrimental to the client?s interests. Members must use due diligence and due care.


STANDARD OF PRACTICE 5.2
The concept of competency also extends to members who are requested or required to travel to geographic areas where they do not have recent auction experience. Members not in a position to spend the necessary time in a market area to obtain the appropriate understanding of market conditions, may find affiliating with a qualified local auctioneer the appropriate response to ensure a competently conducted auction.


STANDARD OF PRACTICE 5.3
Members must ascertain all pertinent facts necessary to implement a professional marketing campaign.


ARTICLE 6.


Members shall not undertake to provide professional services where either they, members of their immediate family, members of their firm, or any entity in which they have an ownership interest has presently or contemplates an interest, without first specifically disclosing such interest or contemplated interest.
ARTICLE 7.


Members shall not make a profit on expenditures made for their client without the client?s prior knowledge and consent.
ARTICLE 8.


Members shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction would be appropriately served.
ARTICLE 9.


Members shall keep monies coming into their possession in trust for other persons such as escrows, trust funds, client?s monies and other similar items in a separate special account, in an appropriate financial institution.
ARTICLE 10.


Members shall not disclose any confidential client information without the client?s specific consent except as required by appropriate legal authorities.


STANDARD OF PRACTICE 10.1
As a confidential trustee of information provided by the seller or gained by members through their relationship with the seller, members must carefully observe the confidential relationship in order to preserve and protect the client?s trust and to maintain the public?s confidence.


RESPONSIBILITIES TO THE PUBLIC 


ARTICLE 11.


Members shall avoid misrepresentation or concealment of pertinent facts. There is an affirmative obligation to disclose adverse factors of which they have personal knowledge.


STANDARD OF PRACTICE 11.1
In order to protect the public and to avoid misunderstandings, members should create and retain for a reasonable period of time an audio and/or video record of each auction conducted.


ARTICLE 12.


Members must be careful at all times to present a true picture in their advertising and representations to the public. Members shall ensure that all advertising includes the names and information necessary for the public to contact the auctioneer or firm responsible for conducting the auction.


ARTICLE 13.
Members must participate in continuing education programs and should keep informed on all matters affecting the auction industry and their areas of specialization.


STANDARD OF PRACTICE 13.1
It is essential for members to remain abreast of matters affecting the profession so as to fulfill the expectations of the public. These expectations include the member?s abilities to perform the tasks that are regularly expected, as well as those promoted by members as specialties. This responsibility also includes leading public discourse on matters affecting the profession.


ARTICLE 14.


Members are duty bound at all times to abide by the laws and regulations which govern the profession as well as those which, if violated, would negatively affect their ability to present to the public an image of behavior that appropriately represents the professionalism of our industry.


RESPONSIBILITIES TO THE PROFESSION


ARTICLE 15.


Members should never publicly criticize a competitor using false or deceptive information. Where an opinion of a competitor?s transaction is especially requested, it should be rendered in conformity with strict professional courtesy and dignity.


STANDARD OF PRACTICE 15.1
Members shall not engage in practices or take actions inconsistent with the agency of other members. They should not seek unfair advantage over other members and should conduct their business so as to avoid controversies with other members.


STANDARD OF PRACTICE 15.2
Members shall not directly or indirectly solicit the affiliation of an employee or independent contractor in the organization of other members without the prior notice to said member.


ARTICLE 16.


Members should willingly share with other members the lessons learned through experience and study to better the profession, members? business practices and how the profession is perceived by society. Members shall be loyal to the NAA; this includes active participation in educational, civic and charitable endeavors.


ARTICLE 17.


Members should conduct their business affairs so as to avoid disputes with other members. In an instance where a controversy between members arises, they should seek the assistance of the NAA to arbitrate the controversy.


ARTICLE 18.


Members, having personal knowledge of an act by another member that, in their opinion, is a material violation of the ethical principles of this Code shall treat the matter in accordance with the procedures of filing a grievance.



STANDARD OF PRACTICE 18.1
In order for any professional organization to earn and maintain the confidence of the constituencies it serves, it must demonstrate to them the ability to "police" its own. Members have the unique ability to observe and therefore assist in the stewardship of this trust. Members have an obligation to assist the NAA and its officers in all matters, including the investigation, censure, discipline, or dismissal of members who engage in violations of this Code.


STANDARD OF PRACTICE 18.2
Members shall not knowingly or recklessly file false or unfounded ethics complaints.


ARTICLE 19.


Members charged with unethical practice or who are asked to present evidence in any disciplinary proceeding or investigation shall promptly and voluntarily place all pertinent facts and information before the appropriate body.


STANDARD OF PRACTICE 19.1
Violations of any provision of this Code should not give rise to a civil cause of action and should not create any presumption that a legal duty has been breached. Violations of the Code are not designed or intended to be the basis of any civil liability.



GRIEVANCE PROCEDURES


Reg. 1 Grievance Committee


R1.1 The Grievance Committee shall consider, resolve and recommend to the Board appropriate action for grievances arising from alleged unethical behavior of members.


R.1.2 The Committee shall consist of the Executive Committee. When meeting to consider a grievance, there must be a quorum of at least three (3) members of the Committee. All members of the Committee shall remain as such until the final determination of any ethics matter previously heard by that Committee but not yet resolved, notwithstanding the fact that a new Committee may have been appointed or created by election.


Reg. 2 Grievance Procedures


R2.1 Any grievance must be submitted in writing to the CEO with the necessary supporting documentation, signed by the complainant. The CEO shall forward all grievances to the Chairman.


R2.1a In filing a charge of a violation of the Code of Ethics, the charge must read as an alleged violation of one or more Articles of the Code. Standards of Practice may not be cited as the basis of the complaint, but only in support of the charge.


R2.2 Upon receipt of a written grievance, the Chairman shall notify the members of the Committee and initiate a Committee review of the allegations.


R2.2a Grievances will not generally be considered until all pending administrative hearings and/or court proceedings have been resolved.


R2.2b In extraordinary circumstances, the Committee can, with Board approval, refer the grievance to outside arbitration. Any expense of referral shall be the responsibility of the NAA.


R2.3 If the Committee determines the grievance has merit and is appropriate for Committee review, a copy of the grievance, any supporting documentation and a copy of these regulations shall be sent via Certified Mail, Return Receipt Requested to the individual(s) against whom the grievance was filed.


R2.4 The individual shall have thirty (30) days from the date of the mailing to submit a written response to the CEO, who shall forward it to the Committee.


R2.5 After review of the response, if the Committee determines that the grievance has validity, it shall notify the individual against whom the complaint was filed of their right to submit additional evidence to the Committee, either in writing or at a hearing requested by the individual. The individual shall have ten (10) days to respond.


R2.5.1 If the individual chooses to submit additional evidence in writing (without requesting a hearing) the Committee shall allow the complainant the opportunity to submit final written comments. The complainant shall have ten (10) days to respond.


R2.5.2 If the individual requests a hearing, the Committee shall facilitate this request within a reasonable time. The Committee shall allow the opportunity for all the parties to be present, to be represented by counsel, and to participate in the proceedings. The Chairman of the Committee shall establish and forward hearing procedures to all parties and participants not later than twenty (20) days prior to the hearing.


R2.5.3 If the individual does not submit additional evidence or request a hearing, the Committee shall decide the complaint on the evidence submitted.


R2.6 Grievances shall be decided by the Committee based on all the evidence before it within a reasonable time. The CEO and the NAA general counsel may, at the request of the Chairman participate in the meetings, but shall have no vote.


R2.7 The Committee shall report its findings and recommendations to the Board. These recommendations may include censure, suspension or revocation of the individual?s membership. The Board shall have the power to accept, reject, or modify the findings and recommendations of the Committee. If, however, the individual appeals the decision of the Board, the effect of the Board?s action shall be delayed until final determination of the appeal.


Reg. 3. Appeal Procedure


R3.1 Upon determination of a grievance by the Board, all parties shall be notified of their right to and procedures for an appeal.


R3.2 A party shall have thirty (30) days from the date of mailing of notification of the decision of the Board to file an appeal. The request must be in writing, made to the CEO, and specify the basis for the appeal.


R3.3 If no appeal is filed within (30) days, the decision of the Board shall be implemented by the CEO.


R3.4 If an appeal is filed, a hearing shall be held within a reasonable time before an Appeals Board. The Appeals Board shall consist of three Past Presidents who are currently members in good standing and who did not serve on the Grievance Committee that heard the complaint. A separate Appeals Board shall be appointed by the President for each appeal. The members of the Appeals Board shall choose its Chairman who shall establish and forward procedures to all parties and participants not later than twenty (20) days prior to the hearing. All parties shall have the right to be present, represented by counsel, and participate in the proceedings.


R3.5 The Appeals Board, by majority vote shall (1) reaffirm; (2) modify; or (3) reverse the original decision. The decision of the Appeals Board shall be rendered within a reasonable time and shall be final.








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Vowell Realty and Auction Company

Address

7550 Hwy 5
Cabot, Arkansas 72023

Phone:

Office: 1-501-605-1212
Fax: 1-501-605-1225

Robert Vowell

Auctioneer Lic. #1781
Email
robertvowell@centurylink.net
  info@vowellrealtyandauction.com






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