Robert Calistri's, blog,

Here's how our auction process works. All properties sold at auction are sold "as is, where is" with no contingencies and the closing usually occurs within 30 days of the auction.

The first thing is to determine if the property is a good candidate for the auction process ( There is more info on our web site as to what makes a good candidate www.realestateauctionsllc.com). We do this by looking at comparables sales over the past two months and the tax records. The process is used to advise the seller of a reserve price which has the highest probability of selling their property.

Next, we select an auction method. An absolute auction does not set a minimum or reserve amount, allowing the property to be sold at the highest bid no matter the amount. This could be above or below the price owners hoped to receive. A reserve auction sets a minimum the seller wants and allows owners to accept or reject the final bid should it fall below the seller's expectation. These auctions start at a minimum amount, which may or may not be disclosed to the public before the auction day. The reserve auction is the method we usually advise.

In all cases the buyer pays a 10% buyers premium on the sale in a real estate auction. If you are the Realtor for the seller, you would get 30% percent of the buyer's premium. For instance, on a $100,000 property auction, the buyer's premium would be $10,000 making the total price the buyer pays $110,000. This means you would receive $3,000 and if a buyer comes with a Realtor, that Realtor also receives 30% percent of the buyer's premium. The seller pays no commission. The seller does pay in advance for the advertising which includes major local newspapers, and anything used specify for their property sale. We usually run advertising in local newspapers for 28 days prior to the auction and send fliers out to all who call looking for information. We do all the advertisement placement and scheduling for the local newspapers. The auction property is placed on our web site. We also send out emails to realtors and individuals who have ask to be placed on our mailing list, at no charge.

At the time that you and the seller decide to auction the property, the property is transferred to us for the period of the auction (about 45 days). We list the property as a single agent only for the period of the auction. During the period prior to the auction date we sometimes get buyers who decide to make an offer on the property. The seller can accept or reject the offer and if accepted the buyer pays the buyer's premium.

When the property goes to auction and the auction concludes with a bid offer. The seller has the option to accept or reject the bid offer if a reserve auction was used. If the homeowner accepts the bid, both sides enter a no-contingency contract to close within 30 days.
I hope this helps, call me with any questions.
Sincerely,
Bob Calistri, Broker
Real Estate Auctions, llc
727-643-5007
bob@realestateauctionsllc.com
www.realestateauctionsllc.com

AUCTION TYPES 

ABSOLUTE AUCTION (or auction without reserve)
1. The property is sold to the highest bidder, regardless of the price.
2. Since a sale is guaranteed, buyer excitement and participation are heightened.
3. Generates maximum response from the market place.
4. Many sellers, including financial institutions and government agencies have begun to use this method more frequently.

MINIMUM BID AUCTION
1. The auctioneer will accept bids at or above a published minimum price. This minimum price is always stated in the brochure and advertisements and is announced at the auction.
2. Reduced risk for seller as the sales price must be above a minimum acceptable level.
3. Buyers know they will be able to buy at or above the minimum.
4. The seller may, however, limit interest in the auction to only those buyers willing to pay the minimum bid price, and therefore it must be low enough to act as an inducement rather than a hindrance.

RESERVE AUCTION ( an auction subject to Confirmation)
In this scenario, the high bid is reduced, in effect to an offer not a sale. A minimum bid is not published, and the seller reserves the right to accept or reject the highest bid within a specified time -- anywhere from immediately following the auction up to 72 hours after the auction concludes. Sellers predetermine the price at which the property will be sold and are not obligated to confirm a sale other than at a price that is entirely acceptable to them. The main disadvantage of a Reserve Auction is that prospective buyers may not invest the time and expense of due diligence when there is no certainty they will be able to buy the property even if they are the highest bidder.

Always remember that an absolute auctions means that if the highest bid is $1.00 it is sold. If you have questions or need more information, i would be happy to help. You can reach me at:

Hope this helps,
Bob Calistri, Broker
727-643-5007
bob@realestateauctionsllc.com
www.realestateauctionsllc.com