Advantages of Selling Lake Property at Auction

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Selling lake property through a real estate auction rather than the traditional ‘list and wait’ method offers several distinct advantages for property owners. Here’s a detailed look:

Advantages of Selling Lake Property Through Real Estate Auction

Speed of Sale

  • Quick Transactions: Auctions have a set date, ensuring the property is sold quickly compared to traditional listing methods where sellers list and wait for offers. When you list a property, there’s no way to know how long it will take for the property to sell. Lake property is particularly susceptible to lingering on the market for months, if not years. During that time, you are likely to incur holding costs and feel pressure from your realtor to lower the price of the property to attract more buyers.

Transparency

  • Firm Marketing Plan: With auction, all the details are buttoned up before you sign the sales agreement. Fees are clearly defined and agreed to up-front. The auction company will propose a clear timeline and a specific sale date, reducing uncertainty and allowing for quicker financial planning. Once the sales agreement is signed, most properties are marketed to be sold within 30-45 days. The entire process, from proposal to closing, is typically completed within 90-days.

Certainty

  • Definitive Sale: Properties are sold in ‘as-is’ condition without financing or inspection contingencies. Sellers know that their property is going to be sold and the date it will happen. And, the high-bidder is legally obliged to purchase the property at the bid price offered.

Hassle-Free

  • Open Houses are Scheduled: well ahead of time so there is no need for homeowners to manage and accommodate last-minute requests for a private showing.
  • No Negotiations: there is no back-and-forth negotiating when selling through auction. Once the high-bidder is determined, they are legally bound to close the sale at the bid price offered.

No Improvements Needed

  • Real Estate is sold As-Is: property owners do not need to worry about expensive improvements or updates when selling via auction. Due diligence is the buyers responsibility and they agree in advance to bid on the property in ‘As-Is’ condition.

Market Value Realization

  • Competitive Bidding: Auctions can drive up the price through competitive bidding, often  achieving a higher sale price compared to traditional listing sales.

Marketing Exposure

  • Intensive Marketing: Auction houses often employ aggressive marketing campaigns, increasing property visibility and attracting serious buyers. Both auction and traditional sales methods use popular sites like Zillow and Realtor.com. Only Auction employs a broad spectrum of marketing deployed over an intense 3-4 week marketing period to generate interest, excitement and bidder demand.

Buyer Commitment

  • Non-Contingent Offers: Buyers at auctions typically make non-contingent offers, meaning they are ready to purchase without financing or inspection contingencies.

Conclusion

Selling a lake property through a real estate auction can be an effective option for lake property owners, especially for those wanting the certainty of knowing when their property will sell without the hassles of negotiation, the anxiety of hoping for an offer, and the risks associated with contingency dependent sale closing.

Investment Funds are Plowing into Farmland

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Investment Funds are Plowing into Farmland  – Here’s Why

Investment funds are buying vast acres of crop and pasture land as they project land values will continue to grow exponentially. What does that mean for independent producers and why is this happening now?

Reuters recently reported that between 2008 and Q2 of 2023, the amount of farmland and agricultural real estate owned by investment funds increased by 231%. The number of acres owned by foreign entities increased 64% to about 40.8 million acres between 2010 and 2021, with the value doubling to about $72.5 billion, according to the most recent USDA data available.

Eric Johnson, co-founder of CJ Real Estate, a land auction company, said that when investors enter the land market it drives up the price per acre establishing a new cost baseline for everyone.

The average age of farmers and ranchers has been rising for years. “Land costs are a substantial barrier for young producers,” said Troy Shelby, President of the Oklahoma Cattlemen’s Association. It’s a significant challenge for family-owned operations. If the next generation doesn’t want to continue the operation, someone is going to buy that land.

Land Values are Growing

Strong demand has been driven by high commodity prices as well as institutional foreign and domestic investment. According to USDA 2023 reports:

  • For U.S. pastureland, the average value in 2023 was $1,760 per acre, a $110 increase over 2022 and a 66% increase since 2009.
  • The average value of U.S. cropland (irrigated and non-irrigated) was $5,460 per acre in 2023, increasing 8.1% from 2022. From 2009 to 2023, cropland value increased 107%.
  • For pasture, the average value at the state level ranged from $490 per acre in New Mexico to $16,600 in New Jersey. The change in value ranged from a 1.5% increase in Wyoming to a 16.2% increase in Kansas. The Northern Plains region (Kansas, Nebraska, North Dakota, and South Dakota) had the highest increase in pasture value per acre at 13.5%.
  • At $155 per acre, the average rate to rent cropland in the United States in 2023 was $7 higher than in 2022. The average rate per acre for irrigated cropland was $237 (up from $227 in 2022) and non-irrigated cropland was $142 (up from $135 in 2022). For pastureland, the average rental per acre at $15 is up $1 from 2022. Among states, the rental cost per acre in 2023 ranged from $34.50 in Oklahoma to $347 in Arizona for all cropland.

Doing More with Less

Some producers say the best way to farm and ranch is the way it’s always been done, doubling down on techniques and values that have served them for years. Savvy farmers and ranchers understand that sustainability is key to improving production efficiency so that they can maintain profitability and meet growing food demand.

Farmers and ranchers today are doing more with less thanks to innovation and technology. In fact, U.S. agriculture would have needed nearly 100 million more acres 30 years ago to match today’s production levels. Smarter equipment, precision tools and biotechnology are helping agribusiness produce more, while using less water, fertilizer and pesticides.

From climate-smart farming practices to voluntary management of forests, grasslands, wetlands and croplands, farmers and cattlemen are not only reducing their footprint, but also are actively absorbing carbon from the atmosphere.

According to the EPA, land management practices alone removed 764 million metric tons of CO2 from the atmosphere in 2018. That is equal to taking 165 million vehicles off the road for a year. And, U.S. livestock emissions are declining thanks to improvements in feed and production and currently make up less than 4% of overall emissions.

Demand for carbon offsets from agriculture has grown significantly in recent years. But the current process is cumbersome, confusing and offers limited return on investment with high transaction costs which limits farmers’, ranchers’ and foresters’ participation. According to a recent U.S. Agriculture Department study, only 3 percent of farmers, ranchers and landowners are using available carbon credit programs that pay them to remove carbon dioxide from the air and sequester it in the soil. Producers who want to participate must hire private parties to help them adopt the right conservation practices and verify that certain processes and protocols were followed in implementing those practices. And accreditation of these private carbon credit management companies is murky at best adding more doubt to an already murky process.

Sustainability Incentives and Assistance

There are a variety of programs designed to help farmers and ranchers incorporate more sustainable practices into their operations. Here are a few of the most active and interesting:

  • Through the Rural and Agricultural Income & Savings from Renewable Energy (RAISE) initiative, the USDA aims to help individual farmers deploy smaller-scale wind projects using USDA’s Rural Energy for America Program (REAP) which provides $144 million in grant funding for underutilized technologies.
  • The DOE is providing $4 million in funding related to REAP, including $2.5 million to support the testing, certification and commercialization of the latest distributed wind technologies including for the agricultural sector, and $1.5 million to support outreach and the identification and development of new business models for farmers to save money and earn income deploying these technologies.
  • The Environmental Quality Incentives Program (EQIP) is a voluntary conservation program that offers farmers and ranchers financial cost-share and technical assistance to implement conservation practices on working agricultural land.
  • AFRI Sustainable Agricultural Systems (SAS) promotes the sustainable supply of abundant, affordable, safe, nutritious, and accessible food and other agricultural products, while enhancing economic opportunities.
  • Equipment Grants Program (EGP) serves to increase access to shared-use special purpose equipment/instruments for fundamental and applied research for use in the food and agricultural sciences programs.

A More Productive Future

Farm and ranch sustainability practices play a crucial role in maintaining the long-term health and productivity of agricultural lands. By implementing conservation measures, landowners can reap several benefits:

  • Improved Profitability: Sustainable practices enhance production efficiency, reduce input costs, and optimize resource utilization. This translates to better financial returns for landowners.
  • Environmental Stewardship: Conservation efforts contribute to soil health, water quality, and biodiversity. By safeguarding natural resources, landowners ensure the resilience of their operations and protect the environment for future generations.
  • Carbon Sequestration: Practices like cover cropping, rotational grazing, and reforestation sequester carbon, mitigating climate change. Agricultural lands can serve as valuable carbon sinks, benefiting both the planet and landowners.
  • Collaboration and Support: Landowners can collaborate with agencies like the USDA’s Natural Resources Conservation Service (NRCS) to access technical assistance, financial resources, and personalized advice. These partnerships foster sustainable practices and address specific conservation goals.

The Long-Term Impact on Land Values

The growing demand for food, renewable energy, and sustainable practices, coupled with limited supply should drive positive tailwinds for agricultural land values over the long term.

Institutional investors know that constants such as global population increase, proportional food demand and urbanization make land investment a stable and profitable investment.

The factors that forge land value are evolving. Independent landowners, farmers and ranchers can make the most of this by diversifying income streams by producing renewable energy, embracing carbon credits, leasing to recreational interests, and incorporating sustainability.

3 Secrets to Buying Exceptional Hunting Land

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How to find and acquire prime hunting land for a lifetime of memories.

Picture it: a sprawling 160-acre tract of prime hunting habitat. A place where cherished memories with friends and family unfold over the years. Trophies adorning the walls, and the potential to create lasting family connections that bridge generations young and old. But before you take aim at purchasing hunting land, ask yourself: Are you fully prepared? What should you think about to make your vision a reality?

Meet Eric Johnson, a seasoned land expert with CJ Real Estate. He’s helped hundreds of people just like you find and develop amazing hunting property. Whether you’re after trophy whitetails or year-round sporting, Eric outlines 3 crucial factors to help you realize your dream.

 

1.      Build Relationships

Networking is vital when searching for your perfect parcel. Build relationships with area local landowners and the people that influence is key.

Most landowners want to know that the land they are selling will be taken care of. They’re often concerned that their neighbors will have a good new neighbor when they sell. When landowners know what kind of person you are, and that you’re interested in hunting acreage, you’re much more likely to know about land before it goes on the market.

Local game wardens are another invaluable resource. They are often intimately familiar with public and private lands. They are usually well known to local guides, landowner and business owners.

Not only can they help you find exactly what you’re looking for faster, they can help you properly develop your habitat and introduce you to local landowners that you may not have met.

2.      Hunt What You Know

If you’re lucky enough to lease or have permission to hunt a tract of great habitat already, look for adjacent property to buy. Chances are the landowner of your current tract will help you connect with neighboring landowners.

While that may sound obvious, the real benefit is buying land that you already know a lot about. The knowledge will save you time and money when it comes time to develop the land as you’ll already have a feel for wildlife populations and their patterns, hunting pressure, disease prevalence, predator populations, bad neighbors and many other things that must be evaluated before making a firm offer.

In the process you’ll make a solid financial investment while increasing your total huntable acreage.

3.      Share the Load

Purchasing hunting property with your friends can get a little messy but the pros outweigh the cons when properly organized. There is a lot of work to researching, buying and developing a productive hunting property. Why not share the load with people you trust?

Ask yourself these questions when buying land with partners:

  • Do you have similar goals, budgets and financial stability?
  • Do you have a shared vision for the property?
  • Do you have a clear plan if the situation changes for one or more partner?
  • Do you have a plan for how to share the land?

Buying and building a great hunting property requires patience. Diligently establish local relationships. Avoid rash decisions. Approach your land search pragmatically. When you’ve found some land, bring in experts. Let them help you fully evaluate the land to ensure that the parcel is a smart financial investment as well as a prime hunting tract. The build your dream retreat and enjoy it with friends and family for a lifetime.

Is Real Estate Auction Right For You?

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Opting for a real estate auction offers the sellers the benefit of knowing the exact date their property will sell, a potentially higher sale price, and a straightforward, transparent buying experience. This guide aims to simplify the decision process by exploring the 5 key questions sellers must answer in order to determine if selling via auction aligns with your needs and goals.

Do you have time to handle the sales process?

Real estate auctioneers typically remove the hassle of selling by actively managing every aspect of the sale from signing to closing. That’s why auction is preferred by trust companies and families handling property sales after a loved-one has passed. Sellers often only need to sign the listing agreement and provide access to the property.

The auctioneers team handles everything from that point forward through closing. It greatly simplifies the real estate process and reduces seller stress.

What’s most important to you: a guaranteed sale or sales price? 

There are two kinds of auctions you can choose from: absolute and reserve. Each has its advantages, and the best choice depends on what you’re looking for and the details of your property.

If you’re aiming for a definite sale, an absolute auction is best. Absolute auctions attract larger buyer pools and generate more excitement because buyers have more confidence in the sale. There is no ‘reserve price’. Buyers know that the property will absolutely sell to the highest bidder. An absolute auction is the “classic” type of auction where real estate is sold to the highest bidder, regardless of the price. There is no reserve price or minimum sale price. Bidding in an absolute auction starts at $0 resulting in fast and fierce competition for quality assets.

If you are risk averse, reserve auction may be for you. A reserve price is the minimum amount that a seller will accept as the winning bid. This prevents a bidder who offers a price lower than what you will accept from winning the auction. Reserve prices are not published. Sellers have the accept or reject the high bid within a designated time period – usually 24 hours. The auction company will work with sellers to set the minimum acceptable sales price. The downside of a Reserve Auction is that they reduce the potential buyer pool and bidding competition because there is no certainty they will be able to buy the property even if they are the highest bidder.

Both approaches can work well, and your auctioneer will help you decide the most suitable one based on what you need for your property.

Is your property unique or hard to value due to lack of comps?

When it’s time to sell, setting the right price can be tricky for any real estate asset. Typically appraisers review comparable properties to determine the value. But, for unique properties such as ranches, farms, rural land or lake homes, the lack of comparable properties makes it exceptionally difficult for brokers, banks, sellers and buyers to assign a fair value range to your real estate. An accurate appraisal of your properties value is only possible with a large data set of comparable recent sales.

A real estate auction as the ultimate way to set true market value. Instead of guessing and setting a price, an auction lets the market decide. It draws in all interested buyers to bid against each other. You get the genuine market value of your property, attract lots of interested buyers quickly and, speed up the selling process. This way, you’re not just getting any buyer, but the one willing to pay the most for your unique property. And you might even find the final auction price surpassing your expectations!

Are High Holding Costs a Concern? 

When your property is up for sale, you’re still responsible for ongoing costs like taxes, utilities, insurance, and mortgage payments. For unique properties in rural areas, sellers often wait for months or years to get an offer through the traditional real estate listing sale process. Sellers are forced to pay for all of the expenses of holding the property. Often maintenance is a significant issue for unoccupied homes and buildings – little issues become big problems because no one is there to stay on top of it.

The longer it remains unsold, the more expenses you accumulate. Selling through an auction can speed up the sale process, helping you save money and swiftly move into your next home.

For landlords facing rental properties that cost more to maintain than they earn, or require significant repairs, selling via auction could be an effective solution. It’s a quick way to offload these properties, potentially increase your profits, and free up resources to expand your investment portfolio.

Homeowners facing unexpectedly high costs, such as large utility bills, HOA fees, or maintaining a property that’s too large, could benefit from a quicker sale through auction. This approach could help manage expenses more effectively.

Do you want to sell quickly, with no inspections, repairs or negotiations? 

If so, real estate auction is for you. Properties are sold at auction in as little as 30-days. And, the winning bidder must be willing to accept the property as is. Buyers can’t ask sellers to do extra work or pay expenses on the property. A property sold at an auction isn’t tied to an appraisal, inspection, or mortgage. There also can’t be any conditions or contingencies from the bidder upon selling.

Real estate is sold at auction in ‘as-is’ condition – no contingencies, no inspections and no repairs. Buyers are responsible for inspecting the property and committing to buy the property ‘as it stands’. Sellers do not need to make repairs or improvements.

There’s no negotiating. Real estate auction removes the hassle of negotiating when you sell. No inspections or appraisals are required. And, closings as fast and typically surprise free.

Is auction right for you?

Real estate auction offers the benefits of a quicker sale, higher sales price and a simple transparent sales process.

Analysis of 25 academic studies reveals that property auctions consistently produce greater returns than traditional sales through realtors. Several factors consistently emerged as contributors to the higher returns achieved through auctions. These include:

Speed: Sellers control the sale by setting the sale date. They’ll know exactly when the property will sell. There’s no waiting and no ‘hoping’ to get an offer. Auctioned properties typically sell faster than those listed with realtors, reducing holding costs and increase overall returns.

Competitive Environment: The auction atmosphere encourages a competitive bidding environment, resulting in higher sale prices. Analysis reveals that the average real estate auction results in 15% greater total return. Real estate auctions take advantage of current demand by pitting buyers against each other. Sellers benefit from the competition. Buyers to see exactly how much others are offering and adjust their bids accordingly in real-time.

Transparency: Auctions provide a level of transparency that is often lacking in traditional real estate transactions. Traditional home selling methods often leave buyers in the dark, making offers without knowing what others are willing to pay. Sellers simply don’t know what the maximum offer can be so they often have to settle for less than true value.

Fall Real Estate Auctions

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530 total acres and three homes will be sold to the highest bidder as CJ Real Estate offers two cattle ranches for sale this fall.

430 Acre Ranch and Equipment Sells Dec 7th

Beautiful 430 acres prime development land offered for sale in 11 parcels of 10 to 58+/- acres that include land and 2 homes. The ranch offers prime Mount Pleasant development land located adjacent to the Harts Bluff Pre K-12 school complex along FM 1402. 75+ equipment lots will sell at auction immediately following the real estate auction includes a wide variety tractors, vehicles, trailers as well as farm & ranch equipment.

100 Acre Working Cattle Ranch Sells Nov 15th

100 acre ranch for sale offered in 4 parcels of of 3/4 to 50 acres each. Beautifully updated home and scenic land ideal for cozy home sites or continued livestock operation. Ranch features two ponds, fencing and cross-fencing, multiple barns and outbuildings, 4-bedroom home and scenic views. Conveniently located 3-miles east of Wayne, OK.

Image: Eaton Ranch

6 Tips Before Selling Your Farm or Ranch

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6 Tips Before Selling Your Farm or Ranch

 

For most producers, their farm or ranch is the largest asset they own.  So, when it comes time to sell, you want to make sure it is done right to achieve maximum return on your investment.

Selling land is often an overwhelming task for many landowners, especially if the property was inherited.  We asked experts to give us tips on what you should do before selling. Here’s what they said.

 

Know Exactly What You are Selling

You might be surprised to learn that most landowners really don’t know what they own. Sure they have a general idea but, when it comes to selling that land it’s vital to be certain of all the details – how many acres, where the property boundary lines lie and what easements apply. Having your property surveyed ensures that you’ll know what you are selling, is essential for accurate property valuations and prevents closing surprises that may delay the sale or scare away your buyer.

“In my experience pre-sale surveys are essential for successful sales. Often actual property lines get muddled as ownership transfers over the years.” says Eric Johnson of CJ Real Estate.

This is particularly true for property passed down over generations and in complex land transactions. Pre-sale surveys boost buyer confidence and virtually eliminate problems at closing resulting in higher sale prices.

 

Make a Great First Impression

The second biggest tip for landowners is to prepare your land to attract buyers for the best price. Curb appeal attracts more buyers and drives higher offers because buyers have confidence – they aren’t thinking about ‘what else’ might be wrong with the property.

You never have a second chance to make a first impression. Shelby Enyart of CJ Real Estate relayed that, “it seems obvious, but many sellers struggle to realize that small changes will build buyer confidence so that their property sells faster and for more.”

Get your land ‘market ready’ by clearing away unwanted or unattractive features. Sell faster and at a higher price by:

  • Clearing debris and broken equipment
  • Improving trails, roads, and repairing any broken gates
  • Mow pastures or fields that aren’t in production
  • Trim around all building and clear underbrush

 

Think About Your Lands Highest and Best Use

Maximize your profit potential by thinking of the highest and best use of the land you’re selling. Think about how prospective buyers most likely use the land? What will attract that largest pool of potential buyers? What types of buyers are likely to place the highest value your land? Common uses include:

  • Residential development
  • Commercial development
  • Ag production
  • Recreation
  • Hunting

Understanding what potential your land offers, what investors are most interested in your area and, which buyer pools will offer the most per acre will help you to position your land for faster sale at a higher closing price. It will also help you know what’s most important to clear away, update, or add to your land before the sale.

Consider selling multiple tracts to drive a higher total price. You’ll appeal to more buyers, boosting demand. – Gloria Gilliland, CJ Auctions.

Subdividing your land into smaller parcels that appeal to potential buyers with different end uses can significantly increase your total sales price.  There are several steps you’ll need to consider before moving forward. First, find out if subdivision is possible. Next, determine what work would be required and what costs are involved. You’ll need to engage a surveyor, who will review your proposed subdivision and coordinate with your attorney.

 

Understand Which Sales Method is Best for You

There are a host of factors to consider when determining whether you should sell via auction or traditional listing. Your land is unique and seasoned real estate professionals understand that every sale benefits from a custom marketing approach.

Eric Johnson described it best when he said, “every property is unique. We sit with the client and learn everything there is to know about their property…then help them determine the best sale method for their situation.”

Real estate auctioneers and real estate agents possess specific areas of expertise that distinguish their services and benefit clients differently. Auction gives real estate sellers the benefit of a faster sale, competitive bidding, true market value and more control of the sale – you’ll set the date of your sale and create urgent need for your property. Auctioneers are sales specialists and typically only represent sellers. The traditional listing method turns the process over to a real estate agent that sets your asking price, then waits for buyers to come to them and make an offer.

Real estate auctioneers and real estate agents possess specific areas of expertise that distinguish their services and benefit clients differently.

Real Estate Auctioneers:

  • Are real estate marketing specialists
  • Represent only the seller in a transaction
  • Evaluate and establish property value
  • Manage complex legal structures
  • Give property owners more control of their sale.
  • Provide guidance and facilitate legal compliance

Real Estate Agent:

  • Are marketing generalists
  • May represent both the buyer and seller
  • Focus on localized services
  • Rely on third-party evaluations
  • Estimate asking price then list-and-wait
  • Assist with paperwork

 

Work Smarter, Not Harder

Call a real estate professional.  If you are considering selling land – do your homework and interview seasoned professionals with a proven track-record of selling properties just like yours, who knows the industry and the area.  Selling land is an in-depth process: you need to be able to price it with the market, provide aerial maps, soil maps, FSA information, crop history, cash rent agreements, boundary lines, etc. Having an experienced pro who knows the area, the market, and where to find this information and make it available to potential buyers, will result in much more successful sales.

“I believe that the most important thing for a seller to do when selling their property is use a land broker who is familiar with the general region and current market conditions of the specific property”. Said Chris Lowers of Grey Partners. “The guidance that a knowledgeable land broker can give to a seller is invaluable to making sure the seller maximizes sale price. This is done through the expertise and market insight of the broker when it comes to the marketing of any individual property.

 

Conclusion

Invest in the real estate process. Understand all of your options so that you can make an informed decision.  Gather all the information you have about your property and have it ready for the real estate broker, auction company, surveyor and appraisers. This makes the process much easier on you and all the parties involved. And, you’ll have less stress and more confidence in your decisions.

Sept Real Estate Auctions

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Ranch and Timberland for sale via Real Estate Auction

Nearly 1,200 acres and two homes are on the auction block as CJ Real Estate offers a Red River cattle ranch and East Texas timber land for sale on September 6th & 7th.

Bryan County Oklahoma Ranch for sale September 6th, 2023

This amazing 1,100 acre cattle and hunting ranch features two homes, barns, shops and outbuildings offered in 8 parcel of 40 to 364 acres each. Located 15-minutes southeast of Durant, OK and 3-miles north of the Red River.

Bonham Texas residential lot for sale September 6th, 2023

0.1-acre residential lot ready for new home construction located 2-blocks from Powder Creek Park, 1-mile south of Bonham Elementary, Junior and Senior High Schools.

Polk County Texas Timberland for sale September 7th, 2023

No reserve auction of 84-acres ideal for continued timber production, quiet country living or a hunting retreat.

CJ Real Estate is proud to bring these properties to auction. Whether you’re an experienced rancher, land investor, or individual seeking land, our upcoming auctions offer real property sure to meet your needs. Visit www.CJ-RE.com for auction details of these and other ranch, residential and commercial real estate assets.

Image: Real Estate Auction

What is a Real Estate Auction?

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What is a Real Estate Auction?

A real estate auction is an intense, accelerated real estate marketing process that involves the public sale of any real property via open competitive bidding with the highest bidder taking ownership. A professional auctioneer moderates bidding to ensure a fair and legal process.

Real estate auctions are an effective and efficient way to buy or sell real property such as homes, land, commercial buildings, farms and ranches. The advantage of auction is that sellers know when their property will sell and that they will get true market value for their property.

Real estate auction companies are real estate brokers that utilize auction as a method of sale. They may sell property via the traditional ‘list-and-wait’ method too. In most states, real estate auctioneers are required to be licensed to sell real estate or work on behalf of a licensed real estate broker.

The auction method offers a property for sale in an open bidding process with the highest bidder taking ownership. Auctions are typically used when time is of the essence, giving sellers a proven tool to quickly sell assets without discounting. It is a unique platform that brings together motivated buyers and sellers to determine a property’s true market value through competitive bidding. In this article, we will delve into what a real estate auction entails, how it works, and discuss the pros and cons for both sellers and buyers.

What Types of Real Estate are Best Sold at Auction?

All types of real estate can be sold at auction. Auction is the primary method of sale for farms, ranches, luxury homes, commercial and investment grade real estate. Which sales method is best depends upon the specific characteristics of each property and market conditions.

Eric Johnson described it best when he said, “every property is unique. We sit with the client and learn everything there is to know about the property…then help them determine the best sale method for their situation”

The advantage of real estate auction is that it creates the market and establishes a sense of urgency among potential buyers.

That’s why farm, ranch, luxury and other high-value properties are commonly sold via auction. While these types of properties are often sought after, the pool of qualified buyers may be small and geographically diverse. Aggressively marketing these types of high-value properties attracts buyers, generates demand and facilitates a quick sale at true market value.

Distressed properties such as foreclosed homes and bank-owned properties are also excellent candidates for auction.

Unique or historic properties can benefit from auction too. Properties with historical significance, architectural uniqueness, or located in sought-after locations can capture the attention of buyers who appreciate their distinctive characteristics.

What’s the Difference Between a Real Estate Agent and a Real Estate Auctioneer?

Most people are surprised to learn that real estate auction companies and agencies perform many of same functions. Both are licensed professional businesses that must abide by the same laws and code of ethics. While their primary goal is to facilitate real estate transactions, there are fundamental differences in their approach and focus.

Real estate auction companies specialize in selling real estate and focus on delivering the highest sales price to property owners through competitive bidding. Real estate agents are generalists that help people find property through a local MLS and then facilitate a mutually beneficial transaction.

Real estate auctioneers and real estate agents possess specific areas of expertise that distinguish their services and benefit clients differently.

Real Estate Auctioneers:

  • Are real estate marketing specialists
  • Represent only the seller in a transaction
  • Evaluate and establish property value
  • Manage complex legal structures
  • Give property owners more control of their sale.
  • Provide guidance and facilitate legal compliance

Real Estate Agent:

  • Are marketing generalists
  • May represent both the buyer and seller
  • Focus on localized services
  • Rely on third-party evaluations
  • Estimate asking price then list-and-wait
  • Assist with paperwork

What Are the Different Types of Real Estate Auctions?

There are common types of real estate auctions that bidders may encounter.

  1. ABSOLUTE AUCTION: In an absolute auction, also known as a ‘No Reserve’ auction, the highest bidder wins regardless of the amount of the bid. These are exciting events where you could bid $1 and win the auction. Absolute auctions attract the largest pool of bidders because all sales are final – the property will ‘absolutely’ sell.
  2. RESERVE AUCTION: This is the most common type of auction. The seller reserves the right to review the bids and accept or reject the highest offer. Typically, the reserve price is not published and has been set in advance by an agreement between the auction company and the owner.
  3. MINIMUM BID: In this type of auction, there is a minimum accepted bid amount. This is different than a ‘reserve’ because the minimum bid is generally the balance owed to a third-party such as a mortgage balance, taxes, or a lien. All sales at the minimum bid or higher are final.

Why is Real Estate offered As-Is at Auction?

Real Estate is offered ‘as-is’ at auction because the high-bidder is bidding on real property in ‘as-is’ condition without contingencies. This means that the seller will not repair or improve the property in any way prior to closing. Properties are sold in ‘as-is’ condition at auction because the high-bidder is legally obliged to purchase the property at the bid price offered.

Bidders should conduct their own due diligence prior to bidding. The real estate auction company will disclose things such as lead paint, inclusion in a flood plain, easements or other known potential issues in the printed auction materials and the auctioneer will verbally communicate any such disclosures in advance of the auction.

Can Buyers Back Out of a Real Estate Auction Bid?

At a live auction, a bid represents a legal obligation. If you make a bid, you are committed to purchasing the property at the bid price you offered. Always perform due diligence prior to attending an auction. Ask questions prior to the auction. Read and understand the auction terms and conditions. Then, establish your bidding strategy and pricing parameters prior to auction and stick to it.

How Do Real Estate Auctions Work?

  1. Preparation:

The auction process begins with the seller or their representative meeting with a licensed real estate auction company to help evaluate the best method of sale for their needs.  The property is evaluated, appraised, and the marketability is assessed. The auction company will review these findings with the seller, discuss the pros and cons, then determine if auction or listing is the best method of sale for that property.

  1. Planning:

Once the seller decides to utilize the auction method, the real estate auction company will:

  • Set the auction date, time and location.
  • Package the property for maximum pricing potential through parceling.
  • Organize all relevant documentation, disclosures and other legal paperwork.
  • Prepare a marketing recommendation.
  • Prepare marketing materials.

 

  1. Marketing:

Real estate auction companies are expert marketers. They will tailor the marketing to attract a pool of the most qualified buyers through a comprehensive marketing campaign. Marketing typically involves broad reaching and highly-targeted online marketing reinforced with eye-catching signage and intense local advertising as well as personal outreach to insiders and investors. The goal is to create interest, build competitive excitement to attract a pool of qualified bidders.

 

  1. Inspection:

Interested buyers are typically provided with the opportunity to inspect the property before the auction. This allows them to assess the property’s condition and evaluate its suitability to meet their needs. Buyers are encouraged to conduct thorough due diligence to minimize risks.

 

  1. Auction Day:

On the auction day, interested buyers will have one last opportunity to inspect the property in-person for an hour or two prior to auction. At auction time, the auctioneer will make pre-auction announcements that include disclosures and then ask the audience if there are any questions for the record. Once all questions have been answered, the auctioneer opens the bidding with an initial starting bid. Potential buyers make successive bids, each higher than the previous one. Those new to the process may have trouble keeping up with the fast and exciting pace. The auctioneer is responsible for moderating the process and ensuring fairness and transparency. Auctioneers often work with a team consisting of the auctioneer, ringmen and an auction manager.

The auctioneer is the public face of the auction. The top role of the auctioneer is to expedite the sale and keep track of the bids ensuring a transparent process in a fast, exciting and hectic setting. Auctioneer Ronn Cunningham put it best, “people are amazed… in 20-30 minutes we’re selling a ranch that they’ve called home for many, many years.”

Ringmen assist the auctioneer. During the auction, ringmen monitor the bidder activity. Also known as bid spotters or bid catchers, Sam Grasso says that, ‘the correct title is ringman’. They use their bodies and voices to create energy, encourage sales and ensure that the auctioneer recognizes every bid through voice and hand signals.

The auction manager is responsible for setting up the sale day operation including the stage, seating, lighting, public address system and more. They help ensure that all bidders have access to property information and answer prospective bidder questions about the property or auction process. After the auction, auction managers help process paperwork and inform winning bidders of the next steps to closing the sale.

  1. Closing:

Once the auction concludes, the winning bidder is legally obligated to complete the purchase. Typically, a deposit is required, and the remaining balance is settled at closing within a specified timeframe, usually 30-45 days upon the completion of the auction. If the winning bidder fails to fulfill their obligations, the property may be offered to the next highest bidder.

What Are the Pro’s and Con’s of Real Estate Auction for Sellers?

Pros:

  1. Speedy Sale: Real estate auctions can expedite the selling process, as properties are typically sold within a specific timeframe, avoiding prolonged negotiations and reducing carrying costs.

 

  1. Competitive Bidding: Auctions foster a competitive environment, which can result in higher sale prices. The public nature of the event and the urgency it creates among buyers can generate enthusiasm and increased interest.

 

  1. Market Value Determination: Auctions help determine the true market value of a property, as the price is determined by the bidding process. This transparency provides sellers with assurance that their property is sold at its highest possible value.

 

  1. Control: Sellers have control over the terms and conditions of the sale, including setting a reserve price and a specific auction date. This control allows them to streamline the selling process and align it with their specific needs.

 

Cons:

  1. Uncertain Outcome: The final selling price of a property at auction is uncertain, as it is entirely dependent on bidding. There is a possibility that the property may not sell if the reserve price is not met.

 

  1. Limited Exposure: Auctions may limit the exposure of a property to a specific pool of buyers who are interested in auctions. This could potentially exclude a broader range of potential buyers who may be interested in a traditional sale process.

 

  1. Costs: Auctions involve various costs, including auctioneer fees, marketing expenses, and potentially commissions. Sellers should carefully consider these costs to ensure they align with their budget and overall financial objectives.

Final Thoughts About Real Estate Auction

What Are the Pro’s and Con’s of Real Estate Auction for Buyers?

Real estate auctions provide a proven platform for buying and selling properties. Real estate brokers like CJ Real Estate offer sellers a quick and efficient way to sell their properties at potentially higher prices, while buyers can benefit from competitive bidding and access to unique opportunities. Understanding the auction process and weighing the pros and cons can help both sellers and buyers make informed decisions regarding their real estate transactions.

Pros:

  1. Competitive Environment: Buyers have the opportunity to compete against other bidders, which can result in purchasing a property at a potentially lower price than in a traditional sale.

 

  1. Efficiency: Real estate auctions provide a streamlined and transparent buying process. The competitive nature of auctions encourages buyers to make swift decisions and complete the purchase within a specified timeframe.

 

  1. Access to Exclusive Properties: Auctions can offer access to unique properties that may not be available through conventional channels. Buyers can discover rare investment opportunities and properties with potential value.

 

Cons:

  1. Limited Time for Due Diligence: Buyers must conduct thorough due diligence within a limited timeframe before the auction. The inspection period is typically shorter than in traditional sales, which can increase the risk of unforeseen issues.

 

  1. Competitive Pressure: The competitive nature of auctions may result in buyers feeling pressured to bid higher than their initial budget. It is essential for buyers to establish a clear budget and stick to it to avoid overpaying.

 

  1. Non-Refundable Deposit: Winning bidders are typically required to provide a non-refundable deposit. This may pose a financial risk if the buyer encounters difficulties in securing financing or backing out of the deal.
Image: 80 Acres farmland Alfalfa county, OK

CJ Real Estate Streamlines Land Sales

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TULSA, OK, July 20, 2023 /Newswire/ —

CJ Real Estate helps land buyers find ranch and rural real estate while improving average price-per-acre for land sellers with the launch of their streamlined website.

Real Estate buyers often struggle to find rural land parcels.

“Helping connect rural land sellers and buyers is what we do,” said Eric Johnson, co-founder of CJ Real Estate. Eric further clarified, “Constantly improving our process helps us maintain our edge as the industry leader. That’s why we continually invest in world-class technology that makes it easier for buyers to find what they want so that sellers can realize maximum sales price.”

The CJ Real estate team has a long history of delivering maximum value for property owners and trustees across the south-central plains. “We are absolutely impressed, and our clients are thrilled, “said John O’Brien of Northern Trust Company when CJ Real Estate sold 280 acres for 131% above the pre-sale estimate. Yesterday’s sale proved the power of auction again when the CJ Real Estate team sold 80-acres of Enid, Oklahoma farmland. Marty Powers, owner of the 80-acres remarked, “Results – that’s why I trust CJ Auctions to sell my land. They’ve exceeded my expectations in past sales. Now they’ve brought the highest price-per-acre that anyone can remember for my farmland.”

Chris Lowers, President of Grey Partners reported that, “Over the first 90-days, our core website update for CJ Real Estate increased average daily traffic by 852%, reduced the average bounce rate by 59% and, quarterly conversions tripled.”

ABOUT CJ REAL ESTATE:

CJ Real Estate sells ranch and residential real estate across Oklahoma, Texas, Arkansas, Missouri, Kansas and Colorado. Led by Eric Johnson and Ronn Cunningham, the CJ Real Estate team specializes in complex acreage sales typically dispersing assets in 45 days while outperforming market conditions. What makes CJ Real Estate different is that they give sellers more control through unbiased advice and the opportunity to choose the real estate sale method that’s best for them: auction or listing.

MEDIA CONTACT:
Eric Johnson
1.918.550.8118
Info@CJ-RE.com

SOURCE: Cunningham-Johnson Real Estate

Image: 16108 E 89th

July Real Estate Auctions

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Oklahoma Land and Home Real Estate Auctions July 2023

Are you looking for ranch land, productive farm land or a country home in Oklahoma? CJ Real Estate, the real estate auction industry leader, brings 3 incredible properties to market this Summer.

Alfalfa county Oklahoma farmland for sale July 19th, 2023

For those seeking farmland, we offer an 80 acre parcel that’s been in the same families hands since the land run. This Alfalfa county farmland will sell on July 19th in a no-reserve real estate auction. This property boast rich soils comprised of 87% Grant silt loam with moderate to intense farming capability. And, it’s located 7-miles north of Ringwood, Oklahoma along Hwy 58.

Owasso, Oklahoma 3 Bedroom Home for sale July 19th, 2023

If you’ve been dreaming of waking up to beautiful sunrises and winding down to stunning sunsets, we have an Owasso single-family home ideal for homeowners or real estate investors. Offered via Trustee Auction, this 3 bedroom, 2.5 bath home on 1+ acre lot features a 3-car garage and 25’x50′ heated shop with half-bathroom. It’s located in the heart of Owasso, Oklahoma approximately one-half mile from Centennial Park along 161st E Ave at 89th St North in quiet Hunters Glen Estates.

1,100 acre Bryan county, Oklahoma ranch for sale early September 2023

Late summer brings the auction of a 1,100 acre cattle ranch near Durant, Oklahoma and 84 acres of timber and open land nestled among the whispering pines northeast of Houston, Texas. Both ranches offer a variety of rolling terrain with timber, creeks and ponds.

CJ Real Estate is proud to bring these properties to auction. Whether you’re an experienced rancher, farmer, or investor, our upcoming auctions offer land to meet your needs. Don’t miss out on this opportunity to own the property of your dreams. Visit www.CJ-RE.com for auction details of these and other ranch, residential and commercial real estate assets.