But what about my commission? That is the first thing many agents ask when learning about the auction process. As well it should be. You are a trained professional and deserve the going rate for helping to facilitate any real estate transaction.
The idea that home auctions cut agents out of the sales process is a myth. There are some foreclosure auctions, and online auctions that do not ensure a commission for agents, but with a luxury real estate auction the agents are an integral part of the process. Some high-end auction firms accept properties that are not represented by an agent, but at Concierge Auctions we do not take on properties for auction unless the seller is represented by a local agent. We are experts on the auction process, but the agents are the local real estate experts and know their market better than any outside source. So we believe local agents are an indispensable part of the auction process.
From a seller perspective, the agent identifies the auction opportunity. They decide if the sale is to be conducted with or without reserve, and that the proposed reserve or opening bid range is comparable to other homes recently sold in the area. They help identify potential bidders. And they walk the seller through contractual obligations beginning with the onset of the auction all the way through closing.
From a buyer perspective, the agent identifies the auction opportunity, just like the seller’s agent. They find the right house in the right neighborhood, and make sure it fits the need of their client. They review the opening bid range, and help a client decide if the price is right. They ensure that diligence has been conducted, and make sure their client is buying what they think they are buying. And they walk the client through contractual obligations from the first showings, through registering to bid and putting down a deposit, and all the way through the closing process.
Sounds a lot like the obligations for agents in a traditional real estate transaction, right? Well it is. The difference is that the process is accelerated, a good auction firm will get the property in front of anyone that may be a buyer, and there will be lots of competition to buy the property on auction day. So, why should the agent not receive the going Buyer's Agent Compensation? Seems like they are actually doing more work. The answer is that agents receive their negotiated Buyer's Agent Compensation in every auction that we conduct.
The idea that ‘Auctions cut agents out of the sales process’ is a myth!
Click here for more real estate auction myths. For more on agents and the auction process click below for 7 Steps in the Auction Process for Brokers and Agents. Or leave us a comment, just so we know you are out there!