Selling Property via Auction? - Posted by Jeff

Posted by randyOH on December 17, 2002 at 13:05:01:

nt

Selling Property via Auction? - Posted by Jeff

Posted by Jeff on December 17, 2002 at 08:02:28:

I posted this question on the commercial section and haven’t gotten a response. I’ve decided to post it here because this board gets more traffic.

Does anyone have any comments on selling a commercial property using an auction?

My property is being marketed by a commercial broker right now but I haven’t signed a listing agreement yet. lol - I just got my first offer on the building at 60% of FMV (can close in 30 days though!) for the building which has left me discouraged with my broker. The building has been on the market for sale/lease now for a couple of months.

Being discouraged, I’m thinking of switching from this broker to an auction broker. The building is going to be vacant at the end of this month. Any comments on selling using an auction versus going the regular route thru a commercial agent?

Re: Selling Property via Auction? - Posted by JT-IN

Posted by JT-IN on December 17, 2002 at 10:48:22:

Jeff:

Yes, I have experience with selling commercial property at auction, as well as marketing properties thru brokers. One of the major drawbacks to the broker approach are the contingencies that go along with any such contract to purchase. You can get tied up with due-diligence for quite some time doing so, only to end up with a deal falling through.

The two major advantages of the auction are… and I suggest an absolute auction: 1) The property will usually sell for its highest possible FMV price, 2) The property will usually close in 30 days with no contingencies.

The only drawback to your situation of first marketing through the Broker, and then the Auctioneer, is that it pegs the price, or at least states what someone was NOT willing to pay for it. The experts on Auctions recommend not exposing the property to the marketplace until you do so via auction. This does make some sense to me.

You can read about my experience with the commercial property auction in a previous post, here:

http://www.creonline.com/wwwboard/messages/12639.html

Wish you all the best on your decision…

JT-IN

Re: Selling Property via Auction? - Posted by TC

Posted by TC on December 17, 2002 at 08:17:07:

There was a discussion recently on this board about selling sfh’s via an auction, you might want to search the archives.

305k net?? - Posted by randyOH

Posted by randyOH on December 17, 2002 at 11:24:00:

JT,
I read the posting referred to above and can’t seem to get the numbers to add up. I must be missing something because nobody else questioned it. But if I am following you correctly, you said you paid 132k, sold it for 299k (net) and netted 305k. I calculate the profit to be 167k. How are you getting 305k?

It is a great deal regardless, but I am confused on the numbers. Could you please clear it up for me?
Thanks,
Randy

Re: 305k net?? - Posted by JT-IN

Posted by JT-IN on December 17, 2002 at 11:36:27:

Randy:

The 305K Net Selling Price; $ 335.5K sale price, less auctioneers commission.

The Net Proceeds at closing was 299K and change, after tax proartion, etc. and the net profit on the deal was around 167K.

Hope this clears up the numbers for you…

JT-IN

Re: 305k net?? - Posted by TC

Posted by TC on December 17, 2002 at 13:35:09:

NICE DEAL!