- Few real estate agents know the sources to find real estate auction listings.
- Knowing how and where to find properties that are suitable to be sold at auction is the key to making money as a real estate auctioneer.
- There are seven ideal auction sources in the U.S. and Canada.
As a real estate agent, you probably know lots of sources for finding real estate listings, but few real estate agents know the sources to find real estate auction listings, which make this business less competitive, and thus an excellent business opportunity.
Knowing how and where to find properties that are suitable to be sold at auction is the key to making money as a real estate auctioneer, and also crucial to the success of a real estate auction business.
There are lots of sources available for finding real estate auction listings, but the seven sources that I will share below are the best.
1. Craigslist and Kijiji
Kijiji is the equivalent website as Craigslist in the U.S., which is also an excellent source. With Kijiji the nice thing is, while you are viewing the ads you can click reply and send an email message regarding your auction services directly to the email inbox of the person who posted the ad.
Before searching Kijiji, you should create several different email replies in Word format, so that, when replying to the ads, you can simply copy and paste the appropriate message into the body of the email depending on the type of ad that you are responding to.
For example, you should create several separate customized messages for replying to:
- Real estate agents
The real estate section of the local newspaper is often loaded with potential auction listings, and all you need to do is prospect for them.
As part of your weekly prospecting routine, you should search the real estate classified ads on a daily basis. You might also find auction listings in other headings of newspaper, such as “commercial property” or “investment properties.”
You need to keep it a daily — at least a weekly — habit to search for auction listings in your local newspaper. That way, you are able to track ads that have been posted for several weeks, which would be a good indication that the property owner is a motivated seller and might be interested in an auction — an accelerated selling option.
When you scan an ad with your eyes, look for signs and keywords that identify potential auction listings. The following signs and keywords should never be missed:
- Motivated seller
- Must sell
- Below market
- Estate sale
- Sale due to illness
- Sale due to health
- Death notice
- Estate sale
- Owner financing
- 100 percent financing
- Lease option
- No money down
- Lost job
- Price reduced
3. Real estate agents and brokers
For some properties on the MLS, the traditional sale method will fail, but the auction method will succeed. However, being real estate agents and not real estate auctioneers, they do need cooperation of real estate auctioneer to make a sale.
Most property information packets include special fields or remarks that indicate whether the property is listed as a short sale or a foreclosure.
To prospect for MLS listings that are suitable for auction, simply scan property listings and look for keywords such as “bank owned,” “corporate owned” or REO, which indicate that the listing is a foreclosure. If you see “third party approval required,” that means the property is possibly a short-sale listing.
Once you find the potential auction listings, the next step is to contact the listing agent and offer to work with him or her as a broker’s agent.
Some real estate agents might wrongly assume that working with a real estate auctioneer as a broker’s agent will grab their commission. The fact is that the listing agent keeps the listing commission less the co-broker fee, which they would typically pay to a selling broker anyway.
4. Banks and lenders
Bank REOs and foreclosures are excellent source of properties to auction, simply because the bank’s goal is to get rid of the property as soon as possible.
Most banks and lenders list their REO properties with local real estate agents. Auctioneers can solicit the real estate agents that handle the sale. But they can also call the banks or lenders directly for available foreclosures on hand.
Auctioneers should deal with the person who oversees the REO department of a bank or lender. This is the person who has the power to approve any offers you make to list the property for sale by auction.
5. Lawyers and accountants
We all know that foreclosed properties are an excellent source of properties for auction listings, but you might not know that most foreclosures are due to bankruptcy, divorce and death. Those property owners inevitably seek advice pertaining to these matters, thus they often seek the advice of their lawyers.
Tax issues regarding a foreclosure, bankruptcy or other financial calamity can be complex, and most property owners must turn to their accountants with expertise in tax for guidance.
Connection and networking with local lawyers and accountants who specialize in bankruptcy, divorce or estate matters can bring you a constant flow of quality referrals of those potentially motivated sellers.
To get to know lawyers and accountants with these specialties, just look in the yellow pages of your local telephone book or do a Google search, and you will find lots of lawyers and accountants you can contact. Just mail or email them a letter that introduces you and your auction services along with your business card.
6. Properties in preforeclosure
Ever wonder where real estate auctioneers can find free information about properties in preforeclosure? The answer is the city hall office or RM office.
Although foreclosure laws vary from province to province, properties that are headed for foreclosure will have a notice of default or lis pendens recorded with the city hall’s office where the property is located. Searching through these public records is completely free.
The foreclosure law requires banks to publish a notice of all pending foreclosures. You can easily find these notices listed in the local news paper.
You should also look for public notices of obituaries and tax liens. Estate sales often include real estate that must be liquidated. Tax lien notices are given to properties that are delinquent on property taxes and are scheduled to be sold through a tax auction.
You have every right to contact the owners and offer to auction their property before the property is foreclosed on.
Direct mail, email, phone calls and personal visits are all proper ways to reach these property owners.
7. Foreclosure information websites
There are a couple of dominant foreclosure information websites that specialize in collecting and listing preforeclosure information. On these websites, there is only an executive summary of property information.
To get contact information on these properties in preforeclosure, you have to be a registered member and pay for it.
This is a paid service. Personally, I have never tried their services, and you need to do your own due diligence to find out if their information is valuable to your auction business.
Use these seven sources to find auctions, and they can produce enough auction listings to keep you busy for your career as a real estate auctioneer.
Robin Liu is the founder and CEO of Bidwin.org, the first online real estate auction marketplace in Canada. You can follow him on his blog or Twitter.