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All About Auctions

Real estate auctions add a jolt of excitement to selling land. The energy! The adrenaline! The thrill of watching the clock tick down! Not only are auctions fun, it’s a great way to sell lots of land in a short amount of time.

If you are new to auctions, all the different types of them might be overwhelming. Here’s a quick breakdown of the different types of auctions.

  • Absolute: No minimum bids. The land is sold to the highest bigger, regardless of price. This type of auction is better for less expensive land where the owner is more relaxed on the price. Keep in mind though that since there is no safety net for the seller, you do run the risk of losing money.
  • Minimum-Bid: The lowest acceptable price for properties are pre-determined by the seller. This gives the seller a safety net that they don’t have in absolute auctions.
  • Multi-Par: Multiple parcels of land are combined in each lot. This type of auction is perfect for sellers who want to move vast quantities of land. Since it is more complicated, you will need knowledgeable staff.
  • One of the benefits of online auctions is that it can be done from home. An increasing number of auctions are moving online for the convenience (bid from your living room or on the road!) and cost-savings (don’t need to rent out a room for the event).
  • Reserve: In this auction type, the seller has the unique right to reject the highest bid. If you or your client is selling high-value land, this could be perfect. Some buyers don’t like these auctions because they don’t like the uncertainty of potentially being rejected for the property, even if they have the winning bid.
  • Sealed Bid: Sealed bid means all bids are confidential. This definitely takes some of the adrenaline out of the room but protects people’s financial security.

Now that we’ve covered the different types of auctions, here are some ways to have a great auction.

As A Buyer

Strong Wi-Fi

If your auction is online, a strong connection to Wi-Fi is key. Spotty Wi-Fi has lost people their bids on incredible lots. For example, if two people submit bids at the very last second of an online auction, the person with the faster internet wins. If Wi-Fi in your area is spotty, see if any cafes, restaurants, or libraries nearby offer free Wi-Fi.  

Set Limits Beforehand

In the heat of the moment, it is easy to bid more than you should have. A good way to prevent that is to plan out in advance how much land you need and how much you can afford to spend — and stick to it! Plan on a more conservative budget, but if there is a truly amazing plot of land that you know you can turn a profit on, don’t shy away from it. Skip out on a few other bids if that can secure you getting the lot of your dreams.

Do Your Homework

Of course, you’ve already looked up the price and acreage of the plots you are interested in, but did you do a title search? A title search is the best way to know the regulations and rules that come with a certain property.

If you can, drive by the property to get a closer look. Sometimes, you’ll be able to spot obvious problems that were glossed over in the description. If the property is states away, there is always Google Earth!

As A Seller

Get A Great Auctioneer

Auctioneers are the life and energy of any auction. Who doesn’t love their mind-bogglingly fast chants? If you’ve never been to a live auction before, watch some of our favorite chants to see what all the fuss is about. Find someone with great energy who can keep up!

Know What Makes A Property Good To Auction

Property that is in good condition in a desirable location is likely to get lots of bids. Keep a close eye on the market to see what land types are selling well in your area. Some people think that auctions can be a good place to get rid of properties that they haven’t sold in ages. This isn’t true. Buyers want to be excited about a property and feel like they are finding something new so they are less likely to bid on a property that they’ve seen before.

Work With An ALC

They aren’t called the best in the business for nothing! Not only do ALCs have extensive knowledge of multiple land types, there are many ALCs who specialize in land auctions. When using the Find A Land Consultant tool, be sure to go to the ‘Advanced Search’ feature and click ‘Auctions’ under ‘Service Specialties’.

Real estate auctions are amazing places to sell land and network with other professionals in the land business. Get your bidding paddles ready and have a great auction!

 

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

Working with Efficiency on the Road

How much time do you spend in your vehicle during the work week? What about the average amount of time you spend in your vehicle during a growing season? Don’t forget the commute to and from work. If you tally it up, you might be shocked or perhaps a little horrified at the answer. Then comes the next level of questioning: What do you do with yourself during that time? Are you prepared for what might be waiting for you on a dusty dirt road?

These latter questions were posed during a recent ALC-to-ALC teleconference that I co-hosted with Jeramy Stephens, ALC, from National Land Reality out of Stuttgart, Arkansas. These questions lead us many different places but for me personally, it comes down to efficiency. I have a thirty-five minute drive to and from work on top of wherever my job takes me during the business day. I have been intentional about developing habits that allow me to be productive during this time. This seventy minute minimum of car time has become a valuable part of my work day. Here are some tips that might help you achieve greater efficiency:

  1. Get started on the go. If you have support staff, then I recommend a Dictaphone or other recording technology. I try to dictate at least 2-3 emails/letters every morning on my way to work. These communications can range from crop reports to land inquiries – you name it. Just this very morning I dictated a letter highlighting crop inputs that need reimbursed at an upcoming closing, contacted a neighbor about a property for sale and sent a “feeler” to an owner in Missouri who has underutilized land near a management account of ours in Greene County, Illinois. Each of these things needed to be done. Why not do them while I am sitting in the car?
  2. Plan calls accordingly. We all obviously spend a lot of time on the phone in order to do our jobs well. Some calls need to be made while sitting at the desk so we can access folders, spreadsheets and computers, but there are also calls that can be made anytime, anywhere. I categorize my calls. If I don’t need to reference something at my desk, I save it for when I am in transit going home, to a closing or checking on crops across West Central Illinois.
  3. Be prepared and communicate with your co-workers. If I am going to be scouting farms in Morgan, Scott and Greene counties, then I make sure I have all three of those plat books with me, either in paper or electronically. You never know when you might get a call to check something out while already on the road. If I am going to a county seat, I always ask my co-workers if they need anything while I am there. If I spent all morning near Carlinville, Illinois (1 hour away) it would be discouraging to get back to the office and hear Dad say, “Not sure when you’re going to Carlinville, but the next time you’re there I need something from the courthouse.” Kill multiple birds with one stone and help each other limit needless travel.
  4. De-Compress. This might sound contradictory to previous points, but we all reach a point on certain days where we are fried. We are tired and desperate to chill out a bit. I use the “Pocket Cast” app to download my preferred podcasts. It allows me to quickly filter and download podcasts that interest me. I can go from economics to sports to my own personal nerdy interests with the click of a button (nerdy interests shall go unnamed). As much as I love podcasts and music, I also find it reinvigorating from time to time to simply turn everything off and sit in the silence. Silence is hard to come by at work and I certainly don’t get it at home with sons ages one and six!

Jeramy did a great job on the ALC teleconference call highlighting certain technology he uses to stay plugged in and there is a wealth of articles out there on smartphone apps that help in all sorts of ways. He also mentioned his truck being a traveling convenience store full of emergency and convenient items. He spoke on it better than I can write so I highly recommend you take some time and listen to the recording which can be heard here.

The long story short is that we as professionals in the land industry are on the road a lot. We can’t afford to mindlessly hit seek on the radio over and over. Tweak your tasks that need done to fit your travel schedule. You can get more done and become more efficient in the process. Be prepared. Take the time to think through your day before jumping in the car or truck. Do the preparation that has you ready to tackle the day and adapt on the fly. Do it safely and do it efficiently.

Luke Worrell, ALCContributor Luke Worrell, ALC, Worrell Land Services
Luke Worrell, ALC, is a Broker and Accredited Farm Manager in Jacksonville, IL.  He specializes in agricultural real estate and land management in west central Illinois.  Luke enjoys all things sports and traveling.  He resides in Springfield, IL with his wife Allison and two sons Kale and Benson.