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seller - faqs

Q. Why would I sell Real Estate at auction instead of pricing it?

A. Auctions are fast, efficient and produce fair market value. When a property is "priced" it is either under priced or overpriced. Either way, you lose. If the price is too low it sells quickly, but equity is lost. The first bargain hunter that comes along steals it, perhaps making the profit that should have been yours. If the price is too high the property does not sell. It then has to be advertised again at a lower price or negotiated through negative haggling with one person at a time.

Unneeded real estate is expensive to hold (taxes, maintenance, insurance, etc.) The auction creates a sense of urgency. All serious buyers are brought together to compete, driving the price upward. You are assured of fair market value. The auction method of marketing is the only method where you may receive more money for your property then you would have asked.

Q. What types of properties sell at auction?

A. All types. Bonnette Auction Company has sold luxury homes, recreation property, farms, vacant land, building lots, single family homes, multi-family homes, commercial buildings, condos, townhouses, subdivisions, and industrial buildings.

Q. What is considered when deciding if my property is a good auction candidate?

A. Bonnette Auction Company reviews your motivation and the marketability of the property. In short, a motivated seller in a positive financial position to sell in today's market is a good candidate. If, on the other hand, you owe more on a property then it is worth, the auction method is not for you.

Q. Can I auction a property that has a mortgage, taxes or liens owed?

A. Yes, most Sellers have a mortgage and or other liens on their property. However, the total owed should be substantially less then the anticipated sale price. The pay off will be held out at closing.

Q. What do you mean by insurable title?

A. If a Louisiana State title insurance company will insure the property at closing, you have completed your obligation to the buyer. All Bonnette Auction Company property auction offerings are sold with good, insurable titles and no liens, judgments, mortgages, or back taxes. If the title cannot be cleared, the down payment is refunded to the Buyer.

Q. Are there different kinds of real estate auctions?

A. Yes, auctions can be Absolute, Subject to Confirmation, with Reserve, or with a Stated Minimum.

Q. What does Absolute Auction mean?

A. A property that is sold at Absolute Auction means that it is selling to the highest registered bidder regardless of price. There is no minimum and the seller cannot reject the highest bid attained at the auction.

Q. What does Subject to Confirmation mean?

A. It means that the property is being offered to the highest bidder subject to the seller accepting or rejecting the bid. Most Bonnette Auction Company auctions are offered subject to seller confirmation.

Q. What is a Reserve Auction?

A. It is similar to the subject to confirmation auction, except there is an undisclosed reserve dollar amount set by the seller. The property cannot be sold unless the bidding meets or exceeds the reserve.

Q. What is a Stated Minimum bid auction?

A. An auction where the Seller announces the reserve or minimum bid and generally will sell the property absolute at or above the stated minimum.

Example: This property shall sell at absolute auction at or above a minimum of $41,237. If any one bids the stated amount or more the property will sell.

Q. I have not seen a real estate auction before. Can I come to an auction just to watch?

A. Absolutely, we encourage anyone to attend and watch the bidding. You will be entertained and amazed at the process. Best of all, it's free.

Q. So how does Bonnette Auction Company get compensated for services?

A. The Buyer pays our commission in the form of a Buyers Premium. You do not pay a commission. However, you are responsible for the actual marketing expense. Bonnette Auction Company will provide you with a budget and timetable for the sale of your property at auction.

Q. What is a Buyers Premium?

A. A Buyers Premium is that portion of the commission paid by the buyer. The Buyers Premium is added to the bid to become part of the total sale price.

Q. What is the timetable for a real estate auction?

A. Typically 30 to 60 days. Bonnette Auction Company would recommend 60 days from the time your property is listed until the auction date. The 60 days enables adequate time for brochure distribution, advertising, signage and Preview time. Some special properties require more time and we have conducted auctions in shorter time frames.

Q. What type of marketing campaign is implemented on my property?

A. Bonnette Auction Company conducts an extensive advertising and promotional campaign for your property. The plan includes advertising, news stories, signage, web site, emails, faxes and illustrated brochures.

The timely ads and brochure mailings create a sense of urgency. Buyers are encouraged to view your property and prepare themselves to compete on auction day. Brochures are mailed to adjacent property owners, several hundred neighbors, our database of proven buyers and real estate agents. Real estate agents are encouraged to bring their buyers and share in the commission. Anyone requesting the brochure from print ads also receives it. National, regional and local ads are run for 3 1/2 weeks prior to the auction.

Q. Where is the actual real estate auction held?

A. It depends on the location and type of property. We conduct on-site auctions at the property and auctions of real estate at our auction facility. On-site auctions can be held inside a building or under one of our tents. When we sell from our auction gallery, we do a Power Point presentation.

Q. How do I know that the potential buyers are qualified to buy my property?

A. Bonnette Auction Company has a proven system to get potential bidders on a level playing field prior to bidding. All bidders must register prior to bidding. At registration they must provide some form of positive ID, such as a drivers license, sign the Terms & Conditions agreeing to the rules of the auction, and submit their bank check, guaranteed funds or cash for their initial 10% down payment.

Furthermore, if they are successful they will sign the contract, and the no contingency Purchase & Sale Agreement. They agree to close within 30 days, time is of the essence. If they fail to comply they have agreed in advance to forfeit their down payments, be responsible for remarketing costs and any legal fees involved. The auction sale is a solid sale. The buyers close.

Q. Is there an agreement to sign if I decide to sell my property at auction?

A. Yes, Bonnette Auction Company will furnish you with a copy of our standard Real Estate Listing Agreement upon request.

Q. What paperwork do I need to provide Bonnette Auction Company if I list my property?

A. Bonnette Auction Company would like to have a copy of any and all documents pertaining to your property that you can provide, such as a copy of the deed, survey, tax ID number, tax bill, etc. We also have a Property Fact Sheet that we would like you fill out for our use in describing the property in the brochures and ads.

Q. Is there an opportunity for potential bidders to view my property prior to the auction?

A. Absolutely. In addition to the web site, ads and direct mail brochure we also offer free Preview by appointment. The Preview is an opportunity for buyers to examine closely individual properties prior to the actual auction. It is strongly recommended that all buyers preview properties prior to bidding. Bonnette Auction Company encourages buyers to bring their contractor, home inspector or buyers' broker with them for inspections.

Q. What can I expect on auction day?

A. Bonnette Auction Company will have a professional team of auctioneers and bid assistants plus all equipment necessary to conduct the registration process and the auction. A presentation will be done on each property prior to soliciting bids. Once bids are accepted the auction team will work with the buyers to obtain the highest possible price. Contracts are signed, down payments are placed in escrow and we are on the way to closing.

Q. What is a bid assistant?

A. A staff member, usually one of the auctioneers not currently selling, that is watching the crowd for bids. Sometimes called bid spotters or ringmen, they are extensions of the auctioneer. Often it is difficult for the auctioneer to see all the bids coming from a large crowd in a big room. The bid assistant listens to the "chant" of the auctioneer and scans the room for the current bid. If a bid assistant yells out "yup", then the auctioneer knows that he has the current bid being asked for and will proceed to ask for the next bid.

Q. Where does the bidding start?

A. Anywhere the auction audience wants to start it. An auctioneer might ask for $100,000. to start. If no bid he will drop the asking increment until someone starts. The property might start at $25,000 and soar to $400,000 or end at $50,000 based on market value.

Q. When and where does the closing take place?

A. Bonnette Auction Company recommends 30 Days for closing. However, some sellers opt for 30 or 45-day closings for their auctions. The closing is usually at the Buyers attorney's office or at the office of the lending institution.

Q. Is the closing different then any other real estate closing?

A. No, the closing is the same. The main difference between private treaty selling and the auction method is how the price is arrived at. Once the auction is over your attorney and the attorney for the Buyer get together and arrange for the closing in the customary manner.

Q. What happens if the high bidder fails to close?

A. Bonnette Auction Company immediately notifies the backup bidder in order to secure a new Purchase & Sale Agreement. If not, the property is made available to other registered bidders and the open market and the Buyer forfeits his deposit.

Q. What is market value?

A. Fair market value is the price for which a property will sell on the open market between a willing buyer and a willing seller neither being under compulsion to buy or sell as of a specific date. Generally, it is the price that a property will fetch at a well-advertised auction. Factors that come into consideration are location, age, condition, quality, size and desirability. Auctions are the last niche of the free enterprise system where the laws of supply and demand prevail.

Q. What is high bidder's choice and when is it used in a real estate auction?

A. Properties that are similar (such as residential lots) may be sold using the high bidder's choice method. The high bidder may select from all of the lots in the group, and choose more than one. Of course, if the bidder chooses three lots the bid is multiplied by three. In order to have the opportunity to choose your lot, you must compete and become the winner.

Q. What does by the acre mean?

A. Land parcels are often offered by the acre. The winning bid price is multiplied by the number of acres to arrive at the price.

Example: 150 acres at $500 per acre = $75,000.

Q. Would it be better to conduct the auction on-site at my home or business?

A. It depends on the location and the site. We would do a free site analysis for you. We are fully equipped with tents, folding chairs, tables, portable sound & clerking systems, etc.

Q. How do I learn about buying real estate at auction?

A. Please see How To Buy Real Estate at Auction.