Advantages of Selling and Buying a Portland OR Home through a Real Estate Auction

Posted on: May 25, 2007

Click here to see the previous post, “Want Multiple Offers During a Flat Market? Consider Selling your Portland, OR Property through a Real Estate Auction.”

As you can see from the previous post, this is effectively a sealed bid auction. The advantages to the sellers are a quick sale for the best price and the ability to select the best buyers. Isn’t this really what sellers want? The buyers can feel good about their purchase as they have been given a reasonable opportunity to purchase a good home while retaining their rights as buyers. Both parties to the transaction benefit. So why isn’t this used more often?

The answer is really quite simple: human nature. My personal experience is that most sellers psychologically inflate the value of their properties. It is only natural for them to think that their house is worth more than anyone else’s. Hence, my recommendation of a 5% minimum discount becomes 10 or 15% in their eyes. Sellers are greatly concerned that they will “leave money on the table” when initially pricing their homes so they generally overprice their properties. In fact, most properties on the market today are just one price reduction away from selling. Ask any experienced broker and you will be told that our biggest challenge in this profession is convincing sellers that a good pricing strategy saves them money overall. The fact that some brokers are what could be called “order takers” and will list a home at any price compounds the problem. I could go on for quite a while, but suffice it to say that trust is a key factor in the decision to move forward with a sealed bid auction. Ironically, when there is evidence that a property has been exposed to the market, no logical argument can be made that the best price was not received. Our market has always had a self-righting mechanism. Your property is only worth what a qualified and knowledgeable buyer is willing to pay. A sealed bid auction, when performed correctly, quickly identifies these buyers and brings them to the table sooner.

As always, your comments and observations are encouraged. I’d love to hear from you!

Article written by Don McCredie, G.R.I., CRS, is the owner of portlandrealestate.com. He is a Life Member of the Million Dollar Club and a past REALTOR of the Year for the Portland Metropolitan Association of REALTORS. Currently, he serves as the Broker/Owner of EXIT Acclaim Realty and can be reached at 1-800-203-9898.