Selling commercial real estate has always been a complex process, requiring a lot of time and resources. Besides creating detailed listings and diving into rigorous marketing efforts, you’re also supposed to find a pool of interested buyers for the property and negotiate the terms. To minimize the effort in selling such properties, many people have turned to real estate auctions as a way to optimize and accelerate the sale. That’s why, in this article, we want to elaborate on how to sell commercial real estate at auction and how to successfully navigate the process.
By explaining the different types of auctions available, you’ll know which option suits your needs best. Furthermore, we’ll provide you with a step-by-step guide on how to submit your property for a commercial real estate auction and successfully make a sale. By the end, you’ll fully understand the benefits of such auction events and how they can help you finalize a sale.
Continue reading to discover how to sell commercial real estate online at auctions and the process behind them!
Source: shutterstock.com / Photo Contributor: SaiArLawKa2
How to Sell Commercial Real Estate at Auction Online
Choosing a specific type of commercial property auction will highly impact the bidding process and final sale. To sell commercial real estate at auction online, you’ll need to:
- Find an auctioneer
- Submit the property for evaluation
- Create a customized auction plan
- Promote the real estate to serious buyers
- Live auction and competitive bidding
- Closing the deal and transferring ownership
Find an auctioneer
Always choose the auctioneer based on the type of auction that fits your needs most. We recommend you conduct thorough research to find an auctioneer who specializes in commercial real estate and who also has a trustworthy reputation. For example, we at Auction Section always ensure your property sells at a fair price and are ready to go above and beyond to meet your needs and help you out through the process.
Submit the property for evaluation
After you’ve chosen your designated auctioneer, the next step is to submit your property for evaluation. During this phase, your real estate will be thoroughly reviewed to determine its condition, features, and appeal to buyers. Once the auctioneer has all the necessary information regarding the property’s size, amenities, and location, they’ll conduct a thorough market analysis to determine a fair price for your real estate. Remember that establishing realistic expectations is highly based on the selling price of similar properties and their demand.
Create a customized auction plan
One of the most complex parts of the commercial real estate auction process is creating a customized auction plan. Before the property is listed for auction, it must have a detailed legal pack that includes all the necessary legal documents for the new owners. This includes any title deeds and leases that must be reviewed by the auctioneer to ensure the information listed is correct.
Besides the legal pack, the auctioneer will also create a professional listing highlighting your real estate’s unique features. These listings should always include high-quality photos of the property as well as a detailed description so the buyers know what they’re bidding for.
Furthermore, creating a customized auction plan involves determining a final pricing strategy, including a potential reserve price and starting bids. Doing so allows you to have full control over the sale price and avoid selling the property at a lower FMV(fair market value).
Promote the real estate to serious buyers
Once you have a customized auction plan, the next step is to promote the real estate to serious buyers. This involves creating a detailed marketing strategy used to attract the right demographics to improve your chances of a sale. Depending on the type of property and marketing strategy, the professional listing will be promoted through various channels, whether online or through traditional media. These efforts aim to increase the overall exposure of your real estate and maximize the overall bidding interest.
Live auction and competitive bidding
The main stage of the process is the live auction and competitive bidding. Once the auction event starts, those interested in buying your property will have the chance to compete in the auction through real-time bidding. Due to the transparency of the process, the auction creates a competitive and dynamic environment that improves your chances of selling the real estate.
The auction ends once the highest bidder is the only bidder left. If you have previously set a reserve price, the highest bid must have passed the threshold for the property to be sold. As soon as the event ends, the winner must pay a 10% deposit from the final price to continue with finalizing the sale.
Closing the deal and transferring ownership
The last step in selling your real estate through auction is closing the deal and transferring ownership. Since auctions are known to accelerate the sales process, most final transactions are completed within 30 to 45 days post-auction. During this timeframe, you’re supposed to coordinate with the buyer and sign all the needed paperwork to transfer the ownership.
Source: shutterstock.com / Photo Contributor: SaiArLawKa2
Conclusion
After giving you a detailed overview of how to sell commercial real estate at auction, remember that you should always choose a trustworthy auctioneer who specializes in real estate properties. For example, we at Auction Section specialize in online auctions and can help guide you through the entire process. Not only will we conduct a thorough market analysis to determine a fair price for your property, but we’ll also ensure a transparent bidding process to create a dynamic environment.
With our experience, we can create a professional property listing for your commercial real estate and rigorously promote it to gain the necessary market exposure. So, whether you’re selling an office building or an industrial lot, contact our real estate broker, and we’ll happily answer all your questions!
