An individual who conducts a public sale
of property and/or goods to the highest
bidder, which may be subject to restrictions
by the seller. Real estate brokers may
conduct auctions of real property provided
they comply with local municipal regulations
and applicable provincial real estate
legislation.
In certain provinces/states,
the auctioneer is exempted from registration
provided that he/she is performing duties at
an auction sale, since the auctioneer is
only seeking the highest bid and is not
actually selling the property. Any offers or
deposits obtained after the highest bidder
has been ascertained by the auctioneer falls
beyond the scope of the auctioneer unless
he/she is licensed under the applicable
provincial real estate act.
Auctioneers point to various benefits of
auctioning real estate, but generally
emphasize the competitive bidding
environment, the removal of an artificial
ceiling on the asking price, and the
immediate binding contract that can flow
from an auction. Normally, the auctioneer
operates under an auction authority that is
an agreement between the seller and
auctioneer. This document sets out the
conditions under which a fee is earned and
the length of the agreement.
In addition, auctioneers usually prepare
an auctioning plan or strategy regarding
advertising and promotion, the type of
information to be contained in the bidder’s
information package, the plan for showings,
and auction location. A substantial number
of resources are available for practitioners
contemplating auctioning activities such as
the National Auctioneers Association and the
Certified Auctioneers Institute (both US
organizations).
Generally, three types of
auctions exist in the real estate
marketplace:
The absolute
auction is without a minimum reserve bid
for the seller. This type of auction
normally attracts the widest interest
since a sale is virtually guaranteed
with no restrictions or limitations on
the final selling price.
The minimum bid
auction provides a safety net for the
seller. He/she can establish the minimum
acceptable sale price. Obviously, the
amount of interest in the sale is many
times directly related to the minimum
bid. A minimum well below market value
should attract proportionately more
interest.
The auction by confirmation permits
the seller to reject any final high bid
price.
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