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Hi, I'm Terry Hunter, owner of Hunter-Broker, and YOUR "Ivy League Auctioneer"
People often ask me how can I say that auctions are good for BOTH buyers and sellers, when
a bargain price for a buyer is a low price for a seller, and top dollar for a seller
implies that the buyer is paying too much. Well, this question assumes that "nothing
is as important as price". As I'll discuss shortly, my 30 years of experience
as a broker, and builder, and lender, and land subdivider has proven to me beyond doubt
that other things may often be AS important, or even MORE important, than price to BOTH
the seller and the buyer. However, let's assume for a moment that price
is the ONLY consideration, just to keep things simple.
The seller's perspective is easy. Our mythical seller cares nothing about anything, EXCEPT
price... get top dollar for him, and that's all it takes to make our seller happy.
The confusion arises when considering the Buyer's perspective. People tend to think
in terms of a particular, specified, single buyer. However, that's not accurate...What
an auction does is NOT to "extract more money from a particular buyer" at ALL!
No, the function of an auction is to quickly & efficiently find the BEST buyer for the
property... that buyer who wants that particular property MORE than other buyers want it...
in short, a buyer who puts a higher value or a HIGHER PERSONAL VALUE on the property.
This buyer, who is getting what they want, may also be largely unconcerned with some
appraiser's guess (which is what it is) at what the property might be worth to somebody
else. In my opinion, in fact, an appraisal is just
the opinion of a person with a real estate license who makes a living by not selling
real estate. so, Appraisers are often "off the mark" on what a property is quote "worth"(which
means how much a property will SELL for). Contrary to what many people think of an appraisal
it's not word from on high specifying the market value of this property is... it just
tells you that particular appraiser's guess at market value is so many dollars.
So, it's entirely possible that the seller may feel that he received a premium price
(including a price above somebody's "appraised value"), while, at the very same time the
buyer is just "thanking his lucky stars" that he was able to acquire the property at all,
and at such a great price, too (from his perspective, of course).
Here's an example from my own experience that illustrates the idea. I represented a billionaire
real estate developer partnership in purchasing a ranch to put together with other land to
build an Irvine-like city in the High Desert, north of Los Angeles. The "going value" for
land in the area was around 2,000 an acre. Well, we offered the ranch, the rancher 4,000
an acre, that is, we offered him twice as much as the quote "market value". And, it
was worth Considerably more than THAT to us,too, because we needed it to build a new city.
There are no "price tags" swinging off of real property. Real property is worth what
the highest bidder is willing to pay for it. And, that is the exact job of an auction:
To find that highest bidder, quickly and efficiently.
And, it is common for BOTH buyer and seller to be elated with the transaction, because
each may have different priorities.
To discuss how auctions might serve you as a buyer or as a seller, please call me, Terry
Hunter, at 949-278-1595. Thanks for listening, and I look forward to
talking to you in person.