Gordon’s Estate Services is the only realty brokerage in Ontario that offers its customers the choice and the opportunity to use the auction or tender method to sell their property. We have successfully sold over 2,000 properties by auction.
A real estate auction can be a live or online event. Either way, the process is open, transparent and competitive. Buyers arrive at a fair, market-driven price and sellers realize the best value for their property.
We answer your questions below.
Tendering is the process of purchasing real estate through a confidential written offer. Should you wish to purchase a property by tender, prepare your best offer in consultation with your solicitor and/or agent and present it on the tender date. These tenders are then opened with the vendor and real estate agent present.
Occasionally, Gordon’s Estate Services will offer a property for sale by tender with a minimum bid plus a buyer’s premium, which usually ranges from 5-10 per cent.
This means the seller is contractually obligated to sell the property to the party that submits the highest unconditional tender above the published minimum bid plus the buyer’s premium.
Tender’s must be submitted on the forms provided by Gordon’s Estate Services and accompanied by a fully executed agreement of purchase and sale (also provided by Gordon’s Estate Services) and the required certified deposit amount made payable to Gordon’s Estate Services Ltd., In Trust.
Closing of the transaction will usually take place 30 days following the successful tender.
Many people believe auction means bargain.
Auctioneers understand this psychology and use it to draw large crowds of people which helps to ensure that the price is good for the seller. While there are indeed many good buying opportunities at an auction, the best articles in the world are sold at auction when pricing becomes difficult. The reason why people with very expensive items, and very modest items choose auction, is control.
Through auction, the seller controls the time and terms of the sale, and virtually guarantees a marketplace by creating one if necessary. In strong real estate markets around the country you may have seen properties “listed for one price” and “sold above listing price”.
What happens in these situations is an auction, except that rather than being open by announcements as such to the entire marketplace, they are usually conducted between the two or three buyers that have found the listing at that time, and they make offers not knowing what the other offers are and how much they have to give to beat the other. In these cases, we think of them as listings, but really a limited auction is taking place, and it is acceptable to the seller or they would not be selling.
If an offer to purchase is made prior to the scheduled due date, the unconditional offer must be for the published “buy now” price and provide a 48-hour irrevocable period.
If an unconditional offer is presented to the seller, all parties who have registered their intent to bid on the property will be provided notice that an offer that meets the seller’s terms has been presented, and will then have the opportunity to make their own unconditional offer on the property. To register your intent to bid on a property, please contact a Gordon’s Estate Services Ltd. representative.
Although we do not encourage pre-tender/auction offers, we are obligated to present any offer that meets the seller’s terms. While a sale on the due date is the intent of the tender or auction process, our ultimate goal is to sell the property and meet the seller’s needs.
Conditional offers will automatically be disqualified. However, you may submit a conditional offer. In the event there is one or more valid offers submitted, your conditional offer will unequivocally not be eligible for consideration.
In the event your conditional offer is the only offer and/or all offers submitted are conditional in nature, the seller is under no obligation to accept any conditional offer, regardless of price, but may choose to work toward acceptance with the best conditional offer submitted, at the Seller’s sole and absolute discretion.
Maybe you shouldn’t. Have a look at the cases below, If you are a seller content with where you live, and are considering moving up if you can get the right price, you will find the real estate agent traditional listing a better vehicle to service your needs at that time. However, if you are the executor of an estate or control a vacant property, you are not the same seller, then the auction solution will suit you better.
Auction allows for a certain, uncomplicated sale where the seller is in control. The seller sets all of the sale terms, right down to the amount of the deposit and the day you want to close. The property is sold in a known time frame, of the seller’s choosing, and all viewing dates are pre-set. All offers are firm, without conditions of any kind.
The advantages are different for different sellers, but generally think of it this way. There are three elements of a real estate sale. The price you get, the time it takes to sell it, and the terms of the sale. In a traditional listing you don’t control any of these. You can’t predict how long it will take to sell, nor what conditions will be in the offer. You feel like you control price, but you really only control the right to say no and then keep the property. The buyer always decides the price. You merely accept or reject it.
In an auction, you control both the time and terms because you set them. And the price is controlled to the same extent seen in the traditional listing with the seller's ability to say no and refuse to sell. The difference with auction is that you are going to employ an aggressive marketing campaign to generate a high degree of interest and use the competition and the professional skills of the master auctioneer to drive the offer to its highest level. So the advantage of the auction is control.
Getting the most money is important, to you and to us. But you can’t sell a property through a traditional listing and the auction process at the same time, so you should look at other information to help drive the choice. Information such as “is the property currently being gainfully used by you at this time?” If it is, you may want to get a certain price or otherwise remain in the property. If not, then every day the property remains unsold is a net cost against your bottom line.
Costs such as heat, hydro, taxes, insurance, maintenance, security, depreciation, and loss of return on the money invested otherwise are ongoing and mean that the longer it takes to sell, the less you ultimately put in your pocket. Another reason that you may choose auction is that you are selling the property for an estate or a friend, and you do not live close to where the property is. You are concerned about having the property on the market for an indefinite period of time while it sits vacant. An auction will give you firm control of the timeline here and ensure you are able to sell it and move on. In these situations the risk of listing the property is higher than the risk of auction because you give up more in a listing.
This is a difficult question to answer because it suggests that listed properties typically bring their appraised price which is not true. Appraisals, while helpful in making decisions are an imperfect science. They are a prediction of what a property should bring based on the best available comparable sales in the marketplace. If there are an abundance of sales of very similar properties, then the appraisal is probably an excellent prediction of price.
If there are few sales of similar properties, then the appraisal may be very high or very low compared to actual sale price. This holds true in both traditionally listed properties, and for auction properties. We have sold properties for substantially more than appraisal, and for substantially less. In all cases, the seller agreed to the price, and the appraisals were in error by the amount they differed from the actual sale price.
Real estate auction holds many choices. These include selling live on site, live in a ballroom or office location, by fax, online, by mail, or by a combination of these methods. Auctions can take place with reserve, or without reserve. Most auction processes require the seller to pay for the cost of marketing the product while the buyer is responsible for the commission.
Most real estate auctions can take place within 45 days of contact with our firm, with closing following typically in 30 days. Some properties can be sold faster, and some large properties may require a longer marketing period. Our firm offers all of these services plus traditional real estate listing services. We specialize in gaining a clear understanding of the customers needs, and then making a plan that best utilizes available technologies to best meet your goals.
We do not recommend an auction when you are very satisfied with your home, and you want to sell it only if a certain price is met, failing which you would prefer to keep it. In the meantime you have to live somewhere, so the cost of heat, hydro, taxes, maintenance, security, insurance, etc. are a non-issue. You are enjoying the home and you have to have at least one set of living expenses somewhere.
The reason we don’t advocate an auction in this situation is that an auction does cost some money for marketing in the aggressive manner typical for this method. You risk this cost whether or not you get the price you want. In a traditional listing, there is typically no marketing charge, so if the property does not sell, and you had to live somewhere, then there was no net cost to you. In this situation the auction is more risky.
The one thing you can depend on from a Gordon’s representative is that we won’t recommend our services when someone else’s service or another method will better suit your needs. Our approach is to learn about you and determine if we can help. If we are not the best solution to your needs, we will tell you. Many service providers today are so involved with their own perspective that they simply walk in and sign you up without ever finding out who you are and what is important to you.
At the end of the day, your local providers may be the best solution for you. If that is the case, we will tell you. The question you need to think about is will your local provider consider your needs in as broad a spectrum as we will. Gordon’s is involved with estate settlement throughout the province of Ontario, and we have a network of service providers for similar services throughout North America. Our approach is to take the time necessary to fully understand your needs, and recommend a process that will best suit those needs. The result for you may be the one that involves your local agent. Call us, we will help you find the best solution regardless of whether we play a direct role in it, or just pass on some free advice.
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