When someone tells you they are thinking about using an auction company to sell their home, it usually makes complete sense on the surface. There is a lot going on. Maybe it is an estate situation. Maybe there is personal property to deal with on top of the house. Maybe somebody told them it worked great for a neighbor. Auction companies have been around forever and they present themselves as a one stop solution for a complicated situation. The appeal is real and the intention is smart. The execution is usually where things fall apart. If you’re considering an auction company to sell your Fort Wayne home, here’s the math nobody shows you upfront.
What most sellers do not understand about auction companies
An auction company with a real estate license is not a real estate professional. That distinction matters more than people realize.
Auction companies are good at what they do. Running auctions is a skill. But managing multiple offers on a desirable residential property, counseling a seller through a counteroffer, navigating an appraisal gap, protecting your client when things get complicated, those are different skills entirely. And most auction companies do not have them.
What they have is a license and a pitch.
The math they do not show you upfront
Here is how it usually goes. They come in and tell you they only charge 1.5% instead of the standard 3%. Sounds like a win. Then comes the marketing fee. Now you are at 3.5%. Then the buyer side costs get passed along to whoever shows up, which means your buyer pool just shrank to investors and cash heavy opportunists who are looking for a discount, not a home.
Normal buyers see the word auction and they keep driving. They assume cash required. They assume something is wrong. You filtered out the people most likely to pay full price before the sign ever went in the yard.
What happened in Decatur
A client of mine, Chris, and his mother spotted a house they wanted to buy in Decatur. A local auction company had the listing. There were signs up for the upcoming auction and they had already started staging the place for the personal property sale. Old televisions. Dated furniture. Appliances that should have stayed with the house. Paintings nobody wanted except the people selling them, and even they had already come through and taken what they actually cared about. What was left was the stuff four siblings who do not always agree decided was easier to auction than to deal with.
Chris and his mom called the auction company. The owner told them the house was already sold, thanks anyway. They called back a week later. Maybe it was sold, maybe it was going to auction, hard to say. They called me.
I called the auction company and asked one question. Do you have a seller with a number he is willing to accept in lieu of the auction?
Well, yes. As a matter of fact they did.
What is the number?
They were not sure they could share that.
I explained that yes, they could, and yes, they should, because I had a ready willing and able buyer on the phone and the only thing standing between their client and a clean sale was this conversation.
The number was $240,000.
I looked at the comps. Zillow had the house at $255,000 at the time. I would have listed it at $245,000 and expected to sell it somewhere between $250,000 and $255,000. The auction company had a seller sitting on fifteen thousand dollars of equity they did not even know was on the table. They were too busy pricing the circus tent to notice.
I told Chris it was a fair price and a smart buy. Shake hands and let’s go.
He did. We closed.
Then the auction company held their personal property sale anyway. Three people showed up. One bought something. The rest went to the Franciscan Center, which is exactly where it was always going. And the auction company charged the estate to haul it away.
Here is the part that still gets me. At the final walkthrough, Chris and his mother were standing in the house they had just purchased while the auction company was there hauling out everything that did not sell. Removing the evidence, you might say. And they took that opportunity to tell my clients they could not believe they had agreed to pay my commission. Called it crazy. Implied I had taken advantage of them.
My client had just bought a house for $15,000 under market value because I picked up the phone and made a deal happen out of thin air. The auction company spent three weeks staging a garage sale, held an auction with three attendees, and charged the estate to donate the leftovers.
But sure. I was the problem.
When an auction actually makes sense
If you have a genuine estate situation with significant personal property that has real appraised value, there may be a case for it. If your property is over half a million dollars and the estate is legitimately complex, an auction company might belong in the conversation.
But if you have a well kept house in a desirable neighborhood priced under $250,000, you do not need an auction. You need a Realtor who knows the market, knows how to create competition among buyers, and knows how to get you to closing without turning your front yard into a carnival.
Your house should sell in days with multiple offers. Not in a dusty room with three people and a gavel.
One straight question before you sign anything
If you are thinking about going the auction route, ask yourself this. Do I want someone who runs auctions advising me on how to handle four or five competing offers on my home?
Because that is what a hot market in Fort Wayne can produce for the right property. And that moment, the moment when things get complicated and emotional and the stakes are high, is exactly when you need a professional who has been there before.
I have been doing this in Fort Wayne for twelve years. If you are even thinking about selling, call me before you sign anything. Let’s just have a straight conversation.
See how I work with every seller, start to finish.
David Barlag
Fort Wayne Realtor, Century 21 Bradley Realty
260-750-5737
davidbarlag.com