When you think about a real estate auction, you might associate it with a single home or piece of property. But there’s another segment of real estate auctions that is also one of the most popular options in the auction marketplace – the multi-parcel or multi-tract auction.
The concept is simple. A large piece of property is broken up into smaller and more affordable pieces. The number of tracts or parcels can range anywhere from a couple pieces of property to dozens of individual tracts. Bidders have the opportunity to bid on one individual parcel, a combination of two or more parcels or they can purchase the entire property being offered. A well-planned and well-executed multi-parcel auction event typically uses a multimedia projection screen which projects a map overlay of the property/parcels being offered. There is also multi-parcel software that keeps track of the bids that have been placed and provides the ability for bidders to inquire about how much they would need to bid on select parcels they may be interested in. Professionally trained bid spotters (or ringmen) whom are fluent in the multi-parcel bidding platform, will answer the bidders questions during the event and help ensure that the auction runs seamlessly.
It is customary to hold a mock auction immediately prior to the actual auction event, in order to demonstrate to the attendees what they can expect. Several rounds of bidding occur, offering individual parcels first, followed by an option for bidders to create a combination of parcels and/or to bid on the entire property as a whole. Once all bids have been exhausted and everyone is content on the parcels which she/he currently holds the winning bid on, the auction typically closes all parcels simultaneously and the winning bidders and sales prices are announced.
“The great thing about multi-parcel auctions is that buyers can buy property in the form that best suits their needs. It gives buyers with limited capital the chance to bid on smaller parcels in competition against buyers who intend to purchase larger parcels or the entire property,” said Shawn Terrel, CAI, AARE, UCMA, executive vice-present of United Country Auction Services. “Some bidders may not want to buy the entire property and can only afford a limited amount of acres. The multi-parcel bidding platform allows those bidders an opportunity to participate where they otherwise could not afford to. It gives buyers full flexibility to buy single parcels, multiple parcels, a combination or the entire property.”
The benefits of multi-parcel auctions don’t end with just the buyer. There are many perks for the seller as well. Reducing large land holdings into smaller parcels greatly increases the marketability of the property. It allows the seller to create premium tracts that offer specific features like building sites, water access, scenic views, road frontage lots and recreational tracts. By offering premium tracts, the price per acre will be elevated and have a positive impact on the total sale price.
Multi-tract auctions create more energy and excitement in the auction, and with added buyer flexibility, creates a larger pool of bidders. They are useful for small and large acreages and can include property owned by multiple sellers. Doing so allows the sellers to split the cost of advertising and maximize their marketing efforts.
“By using the multi-parcel auction method, you’ve allowed the marketplace to decide how it wants to buy the property. Ultimately, the seller benefits from the process,” said Terrel.
If you’re thinking about utilizing the auction method to sell your property, do your homework first. Some property may not be suitable for a multi-parcel auction and the success of these type of events will vary depending on individual area markets. If you’re unsure, consult a professional auctioneer. They should understand the local market and help guide you on how to maximize your sale.
“The great thing about United Country Real Estate is we have the ultimate nationwide network of real estate and auction professionals. As the largest rural property marketing company, United Country is the innovator in fast-paced, innovative real estate marketing solutions.
To find a United Country auctioneer near you, visit www.UCAuctionServices.com