Here is some criteria to look for. It is not necessary for the entire list to be present in order to know you are ready for an auction-in fact some may be mutually exclusive- but a healthy combination of these factors points the way to an auction being the most effective means of disposition.

1)      Demand for the asset is very high. If you have an asset that everyone wants, an auction is the only sure way to force all interested parties to compete for the asset. This applies whether the asset is a collectible, a treasury note, real estate, wine, artwork, or any other asset.

2)      Must sell it quickly. If you are in a situation where you must convey title quickly, an auction is the clear choice. Examples include a forced estate liquidation, a court ordered sale, a lease expiration where all the contents must be sold and removed, a real estate asset with carrying costs in excess of the present owner’s capabilities, or real estate in a falling market.

3)      Be sure of a competitive price. If you are in a situation where you will be “second guessed” by junior lien-holders, heirs, or other stakeholders, an auction is often the only defensible way to sell the asset without charges of insider dealing.

4)      Be certain that it will sell. In an auction, the seller dictates the terms. Bidders must agree to the terms or they cannot bid. Auction terms are non-contingent, with no ability for bidders to insert or negotiate contingency clauses to get out of the deal without severe penalties. If you need to be certain that the assets really sells (i.e. not just another dry-run contract that never closes), then auction terms are the most certain to make it happen.

5)      Ensure that the asset receives widespread exposure to the market. Our aggressive auction marketing campaigns cover a variety of media to make certain that no stone is left unturned. Auctions by their very uniqueness attract all serious prospective bidders and “freeze” competitive non-auction offerings out of the market.

6)      Nothing Else Works. Yes, there are certain assets which are brought to us only after the seller has exhausted all other marketing options and had no results. An auction, particularly an Absolute (no reserve price) , forces any interested parties to have to bid if they want the asset, as it absolutely will sell to someone.

These are the most common reasons sellers pursue an auction as the most viable source. If you believe that an auction may be an option for your asset or assets, please contact us and we will be happy to discuss your situation base on your individual needs.

Auction Venues

There are many settings in which an auction can be conducted. Some of these venues go back hundreds or thousands of years, many have come about only in the past dozen years. All can be effective in their own way, and there is no single best way to conduct the actual auction.

Perhaps the oldest recognized method of conducting auctions is the onsite auction. This method was reportedly used by Roman officers disposing of assets seized during military campaigns, in order to raise money for continued operations. In fact, the word auction derives from the Latin “auctio”, meaning “to drive up (the price)”. Onsite auctions are still widely employed to sell single assets, directly at the property location. A similar type is the offsite auction, where an asset may be sold in another location, such as the county courthouse, usually in the context of a foreclosure. Sometimes this is also done in a courtroom- a typical example will be a Section 363 auction under the Chapter 13 bankruptcy laws.

Another widely used variant of this is a caravan auction, where a number of assets are sold site to site under a single marketing umbrella. Many times a bank with scattered small assets will warrant this type of auction, as it is often likely that the greatest interest will be from neighbors of the various assets. Sometimes if there are several assets in a single neighborhood or area in the mix, one asset will be selected as the sale site for all of them.

A typical format we have seen in the past 30 to 40 years is the ballroom auction, where many assets from a market area are sold in sequence in one afternoon or evening. These have the advantage of being able to offer a number of diverse assets on an individual basis in a very short period of time. This format is similar and probably grew out of agricultural tent auctions where multiple parcels of land may be sold to a crowd assembled under a tent.

In the past few years we have seen the development of several online auction formats.

The most common form of online auction is the online only auction. Perhaps the most familiar form of this has been popularized by eBay over the past dozen years. This is usually known as a timed online auction. Bidding ends when the bid deadline is reached, although most timed online formats now have bidding “autoextends” where the bid deadline is automatically extended for, say, 5 minutes if there are any bids placed at the deadline, with bidding concluded when 5 minutes passes with no additional bidding.

Another variant of the online auction is the live webcast auction. In this format, online bidders have an audiofeed and sometimes a videofeed of the auctioneer, who is able to see and accept bids through the online interface, most often through an online facilitator, who acts as a ringperson, taking online bids in much the same way as an onsite ringperson would do.

Often, the live online auction will be conducted in conjunction with an onsite or ballroom auction, where the auctioneer is able to accept bids both from onsite and from online bidders. As mobile bandwidth and streamlining technology has improved and grown more efficient, we find that we are able to offer webcast bidding at onsite auctions as long as there is a mobile phone access signal. Most of our onsite auctions now incorporate live webcast bidding.

Mario Piatelli

“The secret of genius is to carry the spirit of the child into old age, which means never losing your enthusiasm”-Aldous Huxley.

My hero, Mario Piatelli, has been selling to the highest bidder since 1948. I met Mario in 1997 when we referred me a large real estate auction in Heard County, GA. That was shortly after I started my own auction company. Since that day, we have sent a lot of business back and forth between the east and west coast, and he has been a loyal and true friend ever since.

Whenever we do auctions in California, Mario always does the bid calling. We had a particularly challenging sale once in Monterrey County, when he sold a property for $4.1 million with only a handful of bidders in the room. We worked together on another auction in California where we ended up selling a single property for $10 million. Mario sees sales this big pretty regularly, where for us they are pretty rare!

Over the years we have become not only auction affiliates but great friends. Whenever I visit him in California, he insists on picking me up at the airport. Until very recently, he drove a 1966 Vista Cruiser wagon, which he maintained in mint condition! Now he has a new Jeep!

Mario is an honorable business man, a prominent member of his Brentwood, CA community and the ladies adore him! He is quite handsome, and walks with a proud upright posture, and self-assured presence that draws all eyes in the room to him.

He is very kind, thoughtful, and considerate, and always asks about my family. He still enjoys a good meal at a fine restaurant, although he favors his local deli in Brentwood, and often will be seen there first thing in the morning with a cup of coffee. He has never been a drinker, although he can be persuaded to share a glass of wine with friends.

He is up early every morning, and always wears his suit to the office, where he goes every morning after his visit to the deli.

Mario has years on him, but his enthusiasm for life keeps him young. He is active on the internet, and his company website is quite modern and impressive.

The National Auctioneers Association recently published an article about Mario in their November issue of “Auctioneer” magazine. The article, entitled “Oldest Active Auctioneer? NAA Member going strong at 94”.

Accompanying the article is a video produced by my wife, Marsha Howell. Take a moment and meet Mario. You won’t be disappointed.

The Ability to Promote Adequately in the Marketplace

A fundamental difference between the auction approach to marketing real estate and other methods such as ordinary brokerage is the time element. When sellers approach us with an auction assignment, it is not with the idea that they want to sell it “in the next 6 months or so” or “the next year or so” as is usually the case with brokerage listings. When a seller wants an auction, they want it done now!

Realistically, the closest we can do to now! is typically about 30 days. That means 5 days to a week to develop the marketing material, and 3 weeks to implement it.

There are several tools in our kit we can use to get the word out about an auction. The first step obviously is to identify our target markets, based upon the product types, locations, specific and general market conditions, and marketing tool availability (for example, signs are not allowed in certain communities).

Developing the correct marketing mix is an imprecise science; it is based partly upon budget, largely upon past experience, and partly upon gut feelings about what might be effective.

Some items of the marketing campaign are very low cost items, such as signage or ads in Craigslist or email blasts to our internal lists. Some are more substantial, such as a large display ad in a major market newspaper, or a direct mail campaign to 10,000 names in a radius pulled by SIC code, or net worth. Online marketing can run the range from a banner ad in multiple portals to email blasts to targeted lists from industry-specific vendors to developing a Google adword campaign to PR campaigns targeting affinity groups either online or in hard media.

Although it is always possible that an auction marketing campaign can attract sufficient bidders simply by putting up signage on the property and placing the asset on our website and promoting to our email subscribers and our exposure to search engines (a very low cost), it is usually preferable to draw interest from a variety of media by spending some money to reach prospective bidders in places they do business or leisure activities. To that end, we will develop a budget to adequately reach the marketplace.

A marketing budget is very much like an insurance policy. You can spend only a little and on auction day you may not have much protection, or you can spend the optimal amount and ensure that you have reached the market and have bidders there who are ready to compete for the asset.

The ability to promote adequately in the marketplace to get that ready, willing and able crowd is a very important element of a successful auction. Let us show you how!