You鈥檝e got 鈥渁 number in your head鈥� 鈥� the one put there by appraisers, well-meaning relatives, bankers, and agents 鈥� the number you know your home is worth if only a buyer would agree.
Will you get that price? No auctioneer 鈥� or real estate broker, for that matter 鈥� can guarantee it. You can set a disclosed or undisclosed reserve, the minimum price below which you aren鈥檛 required to sell. But the question lingers: What will your home bring at auction?
Does it require a lot of work and therefore an investor is the most likely bidder or could an end-user make it move-in ready without undo difficulty or expense? Where is your home located鈥攏ext to a country club or a quarry? How many other homes are for sale in a six-block area 鈥� one or 100? Value is driven by the property itself.
Value is realized through a seasoned auction company鈥檚 ability to deliver the target-market and the strength of a professionally run auction team led by a skilled real estate auctioneer. Most auctions held under these conditions get every penny your property is worth.
Here's the challenge: Holding onto a property is costly. If your house is on the market for over a year, you have to count all your mortgage interest, insurance, maintenance, and repairs. Houses for sale depreciate because owners usually defer maintenance. If the home is vacant, it may depreciate/deteriorate at the rate of 2.5 percent per month, according to the mortgage-servicing industry. Don鈥檛 forget the NPV factor, or net present value of funds (money tomorrow is worth less than money today). A delayed sale can also mean lost opportunity to invest in something else, including yourself. In real estate, as in life, holding on usually costs more than letting go.
