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Dwight Selby had listed a 41,000-square-foot shopping center in Daytona Beach, Fla., for the Resolution Trust Corporation (RTC). Although the RTC was asking $1.8 million, no buyer had offered more than $1.6 million. After six months, RTC officials told Selby they wanted to try the auction method.
So Selby, president of Selby Realty Inc. in Daytona Beach, worked with an independent auctioneer to place the center in a multiple-property auction. Within weeks, the shopping center had sold for $2.1 million.
Auction is a fast-growing method of selling real estate. A Gallup Poll conducted for the Overland Park, Kan.-based National Auctioneers Association found that more than $40 billion in commercial and residential property was auctioned in 1993, four times the amount in 1980. And many believe that in the future, major real estate companies and franchises will have an auction department or an alliance with an outside auctioneer.
You Know That Saying About Two Heads ...
Given that trend, some auctioneers and real estate practitioners say it makes sense to team up - as Selby did - to sell property at auction.
The team approach isn't without its problems for practitioners. You have to give up much control over the sales process, split a commission instead of going home with the whole purse, and deal with difficult objections from sellers.
But working together can also yield good results for both parties, say practitioners and auctioneers who've tried it. For one thing, the team approach provides sellers with better representation. Two heads - three, if there's a buyers' agent - may well be better than one. For another, by working together, auctioneers and practitioners can bring in more potential buyers. That can increase the sales price and therefore commissions. Finally, splitting the duties can mean less work for everyone.
Before you leap into a partnership with an auctioneer, however, consider …