On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.

Evaluating Your Real Estate for Auction

Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.

Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.

Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.

Locate a Qualified Real Estate Auctioneer

Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.

Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.

You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.

Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.

Types of Real Estate Auctions

Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:

Absolute Auction

The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.

Minimum Bid Auction

Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.

Seller Confirmation or Reserve Auction

With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.

To survive in today’s competition, every business – large, medium, or small – needs to promote itself. It should make people aware of the products and services it offers. The availability of a variety of media sources like television, radio, print, outdoor media, the Internet, etc., offers businesses numerous opportunities to promote themselves with a little effort. Many businesses have already understood the importance of marketing and advertising. Businesses in US spent around $144 billion on marketing and advertising in 2011. Globally, it was $ 498 billion.

Marketing and advertising are not the same
Marketing and advertising are two unique concepts which are important for every business to succeed. Many people wrongly assume that they are the same. But, they are not. Marketing involves various activities like identifying the target markets, their needs and requirements; new product development, promotion, building brand image, etc. Advertising, on the other hand, is one of the marketing activities. It is a kind of promotion to make consumers aware of the products/services available under a brand.

In this article, we will discuss on how marketing and advertising help businesses.

• Marketing defines target markets: Target markets or target customers is a group of people who are more likely to buy products/services offered by your business. Unless a business identifies its target market, it cannot design its advertising strategy that is customized to serve potential consumers. Marketing helps the businesses effectively identify their target markets. Marketing involves research to identify people who you want to sell your products and people who need your products.

• Identifies customers’ needs: It is important to continuously monitor and produce products that suit the requirements of your target group. Marketing does this exactly. It identifies customers’ requirements by conducting various polls, campaigns and research, which enable the businesses to produce products that match the needs and wants of the consumers.

• Builds brand image: Good reputation makes a company stand-out from the rest. As marketing enables a company to produce products as per the customers’ demand, and helps it conduct various programs to promote the brand and its products, a kind of brand image will be established among the public.

• Advertising helps publicize company’s products and services: While marketing involves all the back-end operations like research, collecting opinions, identifying needs and requirements and so on, advertising is associated with publicizing the brand to the consumers. It creates an awareness of the brand as well as the products/services offered by it among people and thus makes the brand well known among the target markets.

Besides creating brand awareness, an effective advertisement does have the power to persuade the public to buy the products. The diverse means of advertising include non-electronic media like newspapers, brochures, journals, magazines, banners, posters, etc., and electronic media such as television, radio, the Internet, etc.

• Differentiates company’s products from others’ products: Another advantage of advertising is that it gives a company an opportunity to differentiate its products from its competitors’ products. Many of us might have seen advertisements which compare the effectiveness of their products with that of their competitors. A popular example is consumer product advertisements, which show comparison of the products. This kind of promotion helps people understand the specialty of your brand/product.

• Enhances your presence in the market: An advertisement campaign continuously reminds the prospective customers about the brand and its products. In a troubled economy, where so many companies are coming in and going out of business within months, an ongoing advertising strategy helps businesses reach their customers effectively. In the long run, it helps the companies build long term relationship with their target customers.

• Marketing and advertising both help a business increase revenues: The final goal of both marketing and advertising is the same – to improve sales and revenues of the company. While marketing improves sales by producing products that serve the needs and wants of the customers, advertising enhances the revenues by making people aware of the products offered by the company.

Any business can accrue these benefits by considering marketing and advertising as essential elements of business. Implementing effective marketing and advertising strategies customized to a business is, however, essential and works out better when both the strategies are integrated. To make the most out of them, it is better to take help of professional advertising and marketing service providers who offer tailor-made strategies designed to meet your business goals and help you prosper and grow bigger.

Auctions are those events where properties or goods are sold to the highest bidder. Auctions are mostly public events, where bidders make a series of bids and purchase a particular item for a high price. During auctions, bidders decide the price of an item rather than the seller. It depends on bidders to decide the amount they would want to pay for a specific item. During an auction, a bid is a proof of a legal binding. Bidders agree to pay the amount that they have bid. In a high profile auction, bidders may have to pay a deposit in escrow accounts or give a proof that they can pay for those items.

Types of Auctions:

Different types of auctions take place around the world. Below mentioned are some types of auctions:

1. English auction:
This is a basic type of auction. In this type, people can see the item and then start bidding. Bidders slowly raise the value of their bid until everyone gives up. The highest bidder is the winner. An auctioneer manages an auction, keeps records of the on going bid and decides the winner. Sometimes, the seller will quote a minimum amount for an item to the auctioneer, below which the auctioneer cannot sell that item.

2. Dutch auction:
In this type, the auctioneer sets a particular price and then gradually lowers the price. People in public will start bidding and later decide which prices are suitable for the item. A seller may use this type of auction to sell large quantities of same products to the public. For instance, a seller may want to sell a large amount of hay and will thus, decide to sell this hay to people for the same amount, once a reasonable price is decided.

3. Silent auction:
In this type, the bidders in public will present their bids in a sealed format. These sealed bids open at the same time and bidder with the highest bid wins. There could be a modification in this type of auction. The bidders are allotted a specific period to bid. They can roam in a room displaying the items, and write their bids on an associated sheet of paper. The bidders are allowed to see bids of other bidders and can choose a higher price for an item. At the end of the allotted time, bidder with the highest bid is the winner.

Examples of Auctions:

Auctions can be of two types either public or private. Sellers may trade any kind of items in both types of auctions. Some areas where auctions take place are:

1. Antique auction: An antique auction consists of a trade opportunity as well as provides entertainment.

2. Collectable auction: In a collectable auction, the seller may put up collectables like coins, vintage cars, luxury, stamps, real estate, and luxury for sale.

3. Wine auction: In wine auction, bidders can bid for rare wine, which may not be available in retail wine shops.

4. Horse auction: Bidders can bid for young horses of the best breed.

5. Livestock auction: In livestock auction, bidders can buy pigs, sheep, cattle, and other livestock.

The other examples of auctions may not be public. These auctions are for bidders from corporate levels. Some examples of private auctions are:

1. Timber auction
2. Spectrum auction
3. Electricity auction
4. Debit auction
5. Environmental auction
6. Auto auction
7. Electronic market auction
8. Sales of business auction

Bidders in an auction need to examine the items displayed and decide an appropriate price for an item. Thus, auctions help buyers in getting the best deals and in gaining better profits for sellers.