We have already sold three of the remaining office/retail units in the Developer Closeout Auction at Nu River Landing and only two units remain for sale. Theminimum bids for the final two units have been lowered in this “Last Chance Auction” and a new deadline has been set, but I will explain why lowering a minimum bid is a marketing tactic we rarely use.
Here at LFC, we are shameless when it comes to explicitly advertising the benefits sellers get when they participate in an online real estate auction. As I mentioned in my most recent post on our residential real estate blog, I have gone as far as climbing up and advertising on the seller’s yacht for our auction of two condos on the Newport Beach Harbor in Southern California as well as having put up 40 directional signs for a single open house. Unfortunately, there are no boats to advertise with in the Nu River Landing auction, but this auction has generated quite the marketing buzz due to the other auction advertising we’ve done.
With three units sold, our marketing team has gone as far to give the Nu River auction the sub-title “If these prices don’t get you excited- Nothing will!!!” The marketing team strategically placed this at the top of the auction event’s web page because minimum bids are the focal point in all of our auctions.
When prospective buyers hear the word “auction” they think there is a deal to be had. That is why the minimum bid must be tantalizing enough to draw bidders into our online real estate auctions. Moreover, minimum bids are a major aspect of online auctions that differentiate their sales from traditional real estate.
If no offers are made on a traditional real estate listing, sellers often feel the pressure to reduce that listing price. This is commonly called chasing down the market, meaning that sellers will lower their price until an offer is made. If the property sells, the purchase price can be closely considered the market value for that property. Auctions work the price from the opposite direction. When pricing begins at a value much lower than what the seller considers to be the listing price (or “suggested value” as we call it), prospective buyers bid until the highest bid is not surpassed before the deadline.
The Bid Deadline for the Nu River Landing Auction is January 14, 2010 and we are expecting to see some considerable action on the last two units. I’m not going to get into explaining the strategy behind the Bid Deadline process in this post, but I will be sure to get one out before the year’s end.
Feel free to leave a comment if you have any questions!
*****
About this author: Casey Flynn is the Communications Manager for the LFC Group of Companies. He also coauthors on ResidentialRealEstateAuctions.com and RealEstateNoteAuctions.com
