15 Feb 2011

When did Auction become a Bad Word

Author: robbleece | Filed under: Uncategorized

On the lawn or online, auctions are taking place in communities large and small across the country, with more than a quarter-trillion dollars in assets and goods being sold via auction every year in North America. One of history’s oldest forms of commerce, dating back more than 2,000 years, auctions continue to be the quickest and the most effective means of price discovery today.

However, auctions continue to be plagued with misconceptions in today’s marketplace. Auctioneers are far more than just fast talkers. We’ve heard it before from naysayers who say, “Selling at auction is selling at a discount.”We’ve also heard the rumors that auctions “only exist for selling distressed property” and “only junk is sold at auction.”

As unfortunate as these rumors are, what concerns our proud auction professionals the most is that no one questions the market value attained when rare, one-of-a-kind works of art are sold for millions of dollars at auction. No one doubts the prices achieved when luxury homes are sold at auction. No one questions the method when celebrities sell their personal items at auction. However, the mere mention of selling homes, commercial property and other assets through the competitive bidding of an auction creates immediate doubt and uncertainty.

The auction process is straight forward, but perception often clouds reality. An auction is simply a public marketplace where items or property are sold through competitive bidding with the highest bid winning the rights to own. Only at an auction will the marketplace (buyers) tell you what they are willing to pay—no more, no less. If it is perceived as being of more value, competition continues. If the maximum value has been met, bidding ends.

Auctions ultimately force buyers to be decisive. While auctions are used to dispose of distressed assets, most people fail to understand why assets are sold at auction. Auctions provide the speed and efficiency needed to complete transactions while returning the highest dollar value. The “For Sale” sign languishing in the yard today does not force or motivate buyers to purchase. The sign will be there tomorrow and most likely the day after, but with a Real Estate Auction a for sale sign will not be posted after auction day.

If you have any questions about Calgary Real Estate Auctions or Calgary Real Estate in General, please don’t hesitate to contact me.

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