Auctions achieve market value via focused marketing.A few years ago, just the novelty Novelty is the quality of being new. Although it may be said to have an objective dimension (e.g. a new style of art coming into being, such as abstract art or impressionism) it essentially exists in the subjective perceptions of individuals. of a residential auction was enough to attract buyers. In 1992, however - with auctions being conducted more frequently, and a general decline of public confidence seen in the long-term appreciation of real estate - developers and sponsors must do much more than simply announce they are having an auction. Success for the sales technique in these tough times requires focused marketing and packaging programs targeted to obtain market value for the housing being auctioned. Real estate auctions that have been successful in 1992 for the most part incorporated two essential characteristics: * The units being auctioned were a quality product in stable communities * The housing was presented in the vital pre-auction period through well-researched and targeted marketing programs that created excitement by promoting value and savings opportunities as well as lower prices. When these two criteria are satisfied, achieving market value through the auction process can yield dramatic results. Two auctions conducted by USAuction this spring are ideal illustrations: * At Hamilton Heights, a new-construction enclave enclave /en·clave/ (en´klav) tissue detached from its normal connection and enclosed within another organ. en·clave n. A detached mass of tissue enclosed in tissue of another kind. of 20 condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. buildings in the Dyker Heights section of Brooklyn, 47 two-bedroom residences sold at auction in a little more than two hours at an average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. of $160,000. Seven additional homes closed conventionally before, during and after the pre-auction marketing period. In almost every case, the auction sales matched the market value of the units being sold conventionally. * At Bridge Harbor Heights Harbor Heights (map) is a neighborhood of the Mamaroneck Village bordered by an arc of the Mamaroneck River on the north and east, Saxon Woods Park on the west and the New England Thruway on the south. , a resorted 100-year-old landmark condominium in Brooklyn Heights, all 45 residences offered at auction sold in nearly two-and-a-half hours at an average price of $158,000. An additional 68 apartments closed conventionally before, during and after the marketing period at an average $171,000. Furthermore, our pre-auction efforts attracted more than 1,500 people to the Hamilton Heights auction, with 500 of them actively bidding. More than 13,000 people visited the site during the four-week pre-auction period - enticed by well prepared ads and articles in relevant newspapers offering bargain prices and quality housing. Simply put, these auctions were marketed and packaged with as much creativity and excitement as any Madison Avenue Madison Avenue, celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S. effort. The sponsor in each case agreed with us that an auction in and of itself cannot succeed. Putting the 'sizzle' back in the project by vigorously marketing the auction approach through an effective advertising and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most effort and a strong direct mail campaign is important so that the property is not considered a "distress sale Distress sale The selling of assets under adverse conditions, e.g., an investor may have to sell securities to cover a margin call. ." In fact, convincing developers and sponsors that the auction process is not a liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy , but rather an acceleration approach which can achieve fair market value, is still one of the toughest obstacles for auction marketers to overcome. However, our experience at Hamilton Heights and Bridge Harbor Heights provides fresh evidence of the viability of the auction method when used properly. What we are able to accomplish for the sponsors in both cases would have taken at least two years to do through the conventional method. With little improvement in the residential market forecast for the balance of the year, aggressive, creative auction marketing programs will continue to serve as a viable alternative to the constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. of today's real estate market. |
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