Auctioneers will use different sources of information and personal experience to value a house that is for sale. The economic value of something measures the benefit provided by a service or good to the economic agent (i.e., governments, individuals, households, central banks, etc.). It is usually measured in units of currency. The actual interpretation of this is, as a result, the max amount of money someone is willing and able to pay for the service or good.
Auctioneers would rather take a “proof is in the pudding” approach. This means placing something, such as a house or other real estate up for auction and let the market define the value with a transparent public competition. This, after all, is real price discovery.
Even though thousands of properties have been sold by auctioneers, most are still surprised when it comes to a final sale price at a North Carolina real estate auction. While they can make estimates, there are often outliers that would prove these predictions are wrong. It’s important to remember this is not an exact science, and if this was a skill, auctioneers would no longer be doing this job because of all the money they would have made.
Sometimes, real estate agents, creditors, bankers, sellers, appraisers, buyers, and interested neighbors want to test the skills of an auctioneer and see if they can guess the selling price at real estate sales
before the bidding begins. How would they even guess? How can an auctioneer attempt to value the real property before a sale?
A true professional can capitalize on the resources they have available to predict or estimate value. Remember, data is knowledge, and today, data is more prevalent than it has ever been in the past. Auction professionals can use many different tools, combined with their experience, to estimate the value of a property and sale.
Current County Assessment or Appraisal
While this is in no way an accurate appraisal amount, most counties have been tracking the sales data in the area for several decades. This data is useful for identifying neighborhoods that are considered “up-and-coming,” or those that are trending down.
MLS Sales Data
Some auctioneers subscribe to the local Realtor association and usually the multiple listing service. The MLS is made up of regional sales data that evolves in real-time in the marketplace. It offers the most current and relevant data related to a property’s market value.
Past Sold Auction Data
The global pandemic that began in 2020 has increased the demand for online auctions. Today, auctioneers fully understand the value offered by past sold data more than ever before. In fact, some auctioneers own their own data, or they subscribe to regularly updated database systems. This includes bidder information, sold prices for properties, and contact information for bidders and properties.
Current or Prior Appraisal
Sometimes, a seller will have utilized the services of a licensed appraiser to offer an estimate of value. While the numbers may be low and high, this is still a resource or tool that helps to contribute to the auctioneer’s analysis.