7 Ways To Ruin Your Own Auction Before It Starts
Auctioneer, Land Broker, Appraiser
Jason is an Auctioneer and Land Broker in northwest Iowa at Storm Lake and Mason City. Jason and his Iowa farmland team specialize in farmland sales primarily serving the heirs to family farms. Today's report details the current land market in Iowa for land being sold at auctions.
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How Do Auctions Work?
Have you considered selling something at auction? Here are a few things you should know about an auction that might help you make good decisions along the way. At DreamDirt we employ a marketing period that matches the needs of the asset or situation. With farmland, real estate or personal property auctions this is typically 4-5 weeks. With more specialized assets this can be longer and in some situation we might conduct an auction quicker if the situation warrants it.
From the beginning what you do as a seller can make a difference in the outcome of the auction. We enter the process at varying stages of your attempts to sell the assets. Sometimes we are the first to know and other times we are not.
I have to articulate one important point before you read these and it always seems to be the commonality between most situations where we see this. Often times many people that are selling assets do not know they are going to have an auction before they have an auction. In other words many set out to sell the assets on their own and then realize its a much bigger task than they imagined with a whole bunch of hassle they did not anticipate so they then look to the services of an auctioneer. The problem is the easy to sell nicest items that would attract buyers to auctions are often snatched up leaving you with only the least desirable items. Its very important to note, its always worth more as a whole than in parts. Let the auctioneers turn it into parts.
1. Don’t attempt to sell the assets privately. This is one of the most damaging things you can do because you will price the assets and its like a bullet fired from a gun, once you have pulled the trigger you can never bring it back.
2. Don’t let someone cherry pick the best assets from you before calling us. This happens especially in situations where there are lots of personal property assets. In estates we’ve often experienced that a neighbor or friend will come buy the best 4 or 5 items at what turns out to very a very cheap price. What this does it cuts out a large portion of the buyers pool that may have attended the auction. Not only did you end up selling it at a cheap price, you may devalue the rest of the assets inadvertently.
3. Don’t place your assets or offer them on social media, Craigslist or other websites. This invites issues that we’ve seen in the past. First consider the security of the items. As you field calls people will learn about them and where they are located at. It will also price the items again putting an expectation out there. This is especially a sensitive issue with farmland. If you have overpriced it will forever turn away some of the potential prospects and if you have underpriced it you will sell it leaving money on the table.
4. After you contact an auctioneer or broker some are tempted to make a last ditch attempt to sell the assets themselves to avoid paying a commission. Commission is an investment and not an expense. Its easy in the beginning of the process to see it as an expense and deduct it from what you feel you will get. Accelerated marketing coupled with a professional auction will get you top dollar for your assets whether its farmland, a tractor or a bedroom set. Avoid the temptation and trust the process because even with commission you are still likely to make more. 2 years ago I did some research on private farmland sales versus public auction sales and private sales were on average 14% below the auction results. Trust me, we do not charge 14% to sell farmland. It will make you money.
5. Once an auction is booked and the auctioneer has started working on it you will receive many inquiries from people that know you that have an interest in the asset or just want to satisfy the burning question. The number 1 thing they will ask you is “what is the price” If you answer you are putting yourself at a disadvantage. A very polite way to defer that question is “The Auctioneer has asked me to refer all questions about price to him” Many will push you by asking the question several ways multiple times and some you may need to be very blunt and tell them “I do not have an answer for you”
6. Do not discuss with anybody that asks questions about locations of items. At times for auctions we provide a preview but only under the supervision of sellers and auction staff. In addition make sure items are stored in secure locations. Since we often sell farm machinery this might not make sense, it can be hard to secure farm equipment. Scales and monitors from equipment can go missing. So can pull trailers, tools, and items that fit in the back of a pickup easily. Keep everything secure, lock doors and do not show the items to anybody without supervision.
7. Be in agreement with co owners and beneficiaries on how you are moving forward, who will be in charge of making agreements, accepting bids or otherwise important decisions. Will it be a team? A single person? The entire group? Often where there are many heirs to an estate there can be many opinions which will create conflicts. Conflicts can be very detrimental and when conflict breaks down communication between heirs a whole host of things are possible that will affect your auction. Its important to understand these things happen often and relying on your auctioneers can be a great help in avoiding or mediating these situations.
Invest in your success and hire an auctioneer. DreamDirt Auctioneers can make your auction the best. We serve the entire Midwest with staff in multiple states. When you find yourself in a situation where you have assets to sell consider our professional services and contact us for a free evaluation and marketing plan for your assets with no obligation at (855)376-3478.
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Whether you’re ready to start the selling process, or even remotely curious, we will gladly provide you with a FREE Market Analysis Consultation! If you are in a position to sell land in the Midwest, we want to help you achieve the top of the market on your sale.
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