The Guarded Secret
The following, "The Guarded Secret" explains in about two minutes why Auction Marketing excels.
"Approximately 90% of all wealth is controlled by about 10% of the population, 90% of all the work force is employed by the other 10%, more or less, roughly only 10% of all income earners use an accountant to minimize their tax basis and about 10%, more or less, of the population stays physically fit". Would it surprise you to learn that this 10% does things differently than the 90% masses"? No. Would it surprise you to learn that this same 10% has learned or studied ways, even learned from an older generation, the strategies if you will, to do things differently from the other 90%? No. The users of auction marketing are typically either in or have aspirations to join this 10% group. Once a seller uses auction marketing to sell property, other methods may pale in comparison and rarely does that seller ever go back to "list and wait" selling. This is why you see valuable, art, antiques, stocks, cars, horses, and real estate being put up for bid because that seller has learned the benefit of the security in competitive bidding, which, in turn, is risk avoidance. That seller has learned about auctions".
Wouldn't it be nice if the seller brought the purchase money to the table"? Since that is impossible, then a wise seller must ask himself "how can I get
the market to quickly agree with my opinion or how can I learn the market's value and do so now?". Therefore to view the cash from the transaction as the asset instead of the goods for sale is the first step toward membership
in the 10% group".
"If you ask a conventional broker about the best selling scenario they ever had, most likely the answer will be that "once they had a listing that had several buyers clamoring for the same property and a bidding war broke out". That bidding war was an accidental auction that they stumbled into and therefore they (the broker/agent) got to taste upward negotiation. This was an example of a market that brought itself to the property. The only reason that it (bidding war) happened was that the market sensed the asking price was too low and disregarded the seller's opinion of value and then came on strong, on their own, to voice their opinions and were willing to compete.
From a price tag comes either downward negotiation or a seller may leave "money on the table" when the property sold too quickly because there was no time to create competition. There is no known date of sale or a final selling price in a downward negotiation process. The seller "lists and waits." The seller that stays this course is now in the trap of thinking that "price creates demand, so let's lower the price to create demand". Savvy sellers know the rule is "demand creates price" and therefore that seller will focus on creating and maximizing demand thorough the recruitment of many bidder's opinions.
Therefore… "Price does not create demand, Demand creates price".
Usually, it's the seller's recognition for the need of a new strategy and then that seller's efforts will begin a conversation with a real estate auctioneer. The users of the auction method of marketing have taken the time to learn how to motivate the market's greed and fear, the only two motivational forces in existence, to create their markets and therefore demand, for their goods for sale, when they want to acquire liquidity".
"Not many men study how to maximize the market's greed and fear that in turn satisfies their own needs.
Most men want to start with their own greed and fear (announce a price) and ...he who speaks price first loses". In other words, the 10% has learned not to speak price first" and… therefore, seeks competitive bidding".
Real Estate Auction Company, Residential and Commercial Real Estate, Multi-Parcel Land Auctions