The overheated residential real estate market in 2005 and the correction in 2006 have brought unprecedented high inventory levels in both new construction and resale markets in 2007. Market times have increased substantially, bringing some sellers into distress if they must sell and relocate. Add to that scenario the recent increase in foreclosures from the sub-prime lending market and you have a strong need for Accelerated Marketing Techniques, or Auctions, designed to sell property quickly through competitive bidding.

Some developers are making use of this means to sell remaining inventory, particularly when near build-out in a given project. This brings new opportunities for brokerage.

When a developer approaches a major auction firm, the auction firm may engage a local brokerage to assist with producing a thorough market analysis and showing the property. A successful auction will attract many bidders with deposits in hand. Not only will the listing broker will be paid commissions on completed sales, he will also have the registrations of unsuccessful bidders who are ready, willing and able to buy another property.

The cooperating buyer’s agent will be paid his or her commission at closing if the buyer's bid is successful. If not, the prospect is probably in better position to bid on another property, either through another auction or through the conventional sales process. Agents should stand by that buyer.

Agents may learn more about real estate auctions through the National Auctioneers Association (see www.auctioneers.org) which is affiliated with NAR or National Association of Realtors. The terms described below are taken from their website and can be found by clicking on "Media" in their menu and going to "Glossary."

Absolute Auction
An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve.

Auction With Reserve
An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or decline any bid within a specified time.