IMPERIAL: Homes going once, twice…
By Sarah AuBuchon Tim Rader can sell a house in 30 days.
Rader, 41, is the owner of Missouri Real Estate Auctioneers, a real estate auction business that he said is becoming one of the fastest growing industries in real estate sales.
“With the rise of foreclosures, the real estate auction has become more popular,” he said. “We can sell your home within 30 days at fair market value.”
Rader said a real estate auctioneer can do everything a Realtor does, but the advantage is that property does not get tied up in the real estate system.
“An agent comes out, looks at your home, asks you what you want for it, then puts it into the MLS system where it gets lost,” he said.
With a real estate auction, Rader said he goes to the home and asks prospective clients what they want for their home. Then, if Rader makes an agreement with the seller, he puts a 4-by-8-foot sign in the yard advertising the auction, runs advertisements in the local newspaper and provides other marketing strategies.
“Three out of 10 times the house sells before the auction,” he said.
Within 30 days before the auction, Rader holds two open houses where a seller’s disclosure list is available to prospective buyers.
“People are always welcome to ask questions, even when they are actually bidding at the auction,” he said.
Rader said he holds two types of auctions, an absolute auction where the house sells at any price, and a reserve auction where the seller sets a bottom dollar.
“It takes about 15 to 20 minutes to sell a home,” he said. “The closing date is worked out by the seller before the auction so when the house sells, I’m done.”
Rich Haas, owner of the Continental Auctioneers School in Mancato, Minn., where Rader attended, said auctioning a home can be a fast, safe and profitable way to sell.
“Ninety-nine percent of the time, it sells at the price the seller wants,” Haas said.
Rader said the reason the real estate market is down is because people are asking too much for their homes.
“If a house doesn’t sell on the real estate market within 29 days, chances are the price is just too high,” he said.
Haas said there are environmental factors that make it hard to sell a home at auction, including poor design, location and traffic concerns.
“If you have a four-bedroom home with only one bathroom and a one-car garage, people aren’t likely to buy it,” he said. “Or if your home is next to a church or a Dairy Queen or other high-traffic business, or if there are railroad tracks nearby, it might be hard to sell.”
Haas said mobile homes, modular homes, condominiums, duplexes and vacant land are poor candidates for a real estate auction and advises auctioneers to steer clear of these types of properties.
“The market is flooded with condos, and mobile homes and modulars just don’t bring a good price,” he said.
Rader said there are 22 prospective buyers on average at each auction, with a mixture of investors, private buyers and real estate brokers.
“You have to have a pre-approved $10,000 line of credit to get into the auction,” he said.
Auctions have several advantages to the seller and the buyer, Haas said.
“You get a quick sale, it attracts attention, freezes the market, creates an urgency to buy and the seller doesn’t pay commission because we charge commission to the buyer,” he said. “Commission is usually around 7 percent.”
One drawback for auctioning a home is the seller must usually pay the advertising cost up front, which can run anywhere from $1,100 to $1,500.
“There are people out there who need to sell their home fast, but don’t have that money up front,” Haas said. “They might already be three payments behind with their lender breathing down their neck. In that case, we front them the advertising cost, but when I do that, I double-dip and charge the seller a 5-percent commission and the buyer 6 percent, giving me an 11-percent commission.”
Rader said he holds about four or five real estate auctions per month, without the annoyance of a high-pressure salesperson.
“I meet with a prospective seller, leave them a brochure with info and say, ‘Folks, think about it, and if I can be of service, give me a call,’” he said.
Rader works by appointment only from his home in Imperial. For more information on Missouri Real Estate Auctioneers, call 314-436-8660 or toll free at 877-436-8660.