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Selling your house at auction or with a real estate agent

BY CATHY MOLITORIS

You’re ready to sell your house. Now what? Where do you turn for help, and what are the best choices for your unique situation? Patrick Morgan, an auctioneer and Realtor with 30 years of experience in the industry, said homeowners have options when it comes to selling a home. Although selling at auction or with a real estate agent are both good choices, Morgan noted, there are pros and cons to each situation.

Selling At Auction

Morgan, who is a member of both the National and Pennsylvania Auctioneers associations, noted that real estate auctions can take place in person or online.

Pros

The price.

Selling at auction gives homeowners the opportunity to potentially make a lot of money. “One of the biggest pros of selling at auction is that we don’t put a price out there and work down,” Morgan noted. “When the bidding starts, the price goes up as the auction goes along, not down. It’s really the only sales process where you start with a bid and negotiate up, not down, through competitive bidding, resulting in a higher price.”

The ease.

Unlike selling with a real estate agent, selling at auction does not require the homeowner to complete inspections or other work before putting the house up for sale. “Typically, a property sold at auction is sold ‘as is,’” Morgan explained. “And once someone has put a bid on that property, their deposit is nonrefundable.”

The control.

Some people believe selling at auction is a risk because the property might go for a price far below its value. This isn’t true in Pennsylvania, Morgan said, where all real estate is sold with a reserve price that must be met for the house to sell. “You can establish what you want as your minimum sales price with the auctioneer prior to the auction, and if you don’t reach that amount, you are not forced to sell it,” he remarked.

The fit.

“If you have a unique property, with maybe a large amount of acreage or some features on the property that are very hard to estimate fair market value on or for a real estate agent to package, selling at auction may best help you get maximum fair market value,” Morgan noted. “Selling at auction is a great option for one-of-a-kind properties.”

Cons

The timing.

Although Morgan said it’s hard to come up with many cons for selling at auction, one possible concern would be the time it takes to get offers on a property. “It typically takes four to six weeks with an auction property, whereas offers can go from contract to agreement in 48 hours with a Realtor,” he commented. So, if your timeline is important to you, an auction might not be the best route.

The audience.

It’s possible you’ll be marketing your house to a smaller pool of buyers if you sell at auction, Morgan said, but he emphasized that you’ll still be reaching a good range of people. “We can list auctions on the MLS, Multiple Listing Services, so that exposes you to a lot of buyers,” he said. He did point out, however, that anyone purchasing a house at auction must have financing secured prior to buying the property, so you could potentially reduce the number of bidders on your home.

Selling With A Real Estate Agent

Using a real estate professional to sell your home is a popular option, said Morgan, who is also a member of the National and Pennsylvania Association of Realtors. Here are the pros and cons of using a real estate agent.

Pros

The network.

Working with an agency means your home will be exposed to a wide range of potential buyers, Morgan remarked. Using the MLS system, a Lancaster County Realtor can connect with thousands of other Realtors in the county and beyond. “I’ve sold properties in Chester, Berks and York counties,” said Morgan, who is based in Lancaster County. Selling a house with a real estate agent gives the seller more opportunities to find potential buyers.

The details.

A real estate agent helps sellers navigate the paperwork of selling a home, from contract details to fine print.

Cons

The negotiations.

Selling a house with a real estate agent can be time consuming if the seller and buyer can’t agree on the price or if the property is overpriced, Morgan said. Likewise, a buyer can renegotiate or terminate the sale based on inspection.

Whichever option you choose, there are more pros than cons to consider, Morgan noted. “It really comes down to the seller’s comfort level,” he stated, adding that he handles about equal amounts of sales at auction and as a Realtor. “The real estate market is good, so both options are good ones. Both methods are tested and proven and good methods for selling your house.”

He emphasized that sellers should educate themselves about how both auctions and working with an agent would best benefit them. “We’re trying to get people to change their mindset, especially about auctions,” Morgan remarked. “People hear ‘auction,’ and they think distressed property or a bank-owned property, but that’s not always the case. I’ve sold homes at auction that are in perfect, eat-off-the-floor, ready-tomove-in condition.”