East Tennessee-
The following is a story of three sisters who inherited the family farm that needed to be sold in Tennessee.
JD’s Realty & Auction was contacted by the heirs of a farm located in East Tennessee. The parents of the three daughters had passed away, and according to the will, the farm was to be sold upon their passing. Two of the daughters were in favor of auctioning the farm and one of the daughters wanted it listed traditionally.
Jason Deel of JD’s Realty & Auction met one of the daughters at the farm to walk around and assess. This took place in April of 2020 right in the middle of the Coronavirus The farm was thought to be sitting on approx. 27 acres and the home was built in 1966. The home was in very bad condition and had been vacant for quite some time. After a survey, we would find out it actually turned out to be 25.55 acres.
After walking around with one of the daughters her objective was clear, sell the farm, get the most money possible so the money can be divided up equally between the three sisters. Neither of the sisters wanted to buy out the other two and they were all prepared to sell the farm.
Jason advised the sister the home was in such bad condition and that the farm would likely sell for a higher price if sub-divided into approx. 5-acre parcels and sold at absolute public auction. The sister agreed, and after a few short days, it was concluded that due to the other sister’s desire, the farm should be listed traditionally for 60 Days. In the other sister’s opinion, a traditional sale would yield the most money for the family.
At the recommendation of JD’s Realty & Auction, the farm was cleaned up, including mowing and hauling off junk and trash. This allowed prospective buyers to see the property. An appraisal was completed on the farm in Nov 2019 for $250,000. After a comprehensive marketing analysis, it was determined the farm should be listed for $270,000. The family agreed to pay JD’s Realty & Auction a listing commission of XX%.
The home was shown over 20 times in the 60-day period. Without fail, the overarching theme from prospective buyers was the house was in such disrepair it prevented them from placing an offer on the property.
Jason devised a plan with a local surveyor Alex McGrew to subdivide the property into five parcels, and only place 1.44 acres with the home. The idea here was to maximize the value of every acre. The most likely course of action for the home would be either tare it down or a full gut of the home. This would allow for maximum value for the remaining acres.
The property was removed from the local MLS on September 21st, 2020 after the 60-day listing period with the only offer during that time being $180,000.
Auction day was set for Sunday, November 7th, 2020 at 2:00 pm. The final survey was completed on Oct 5th, 2020, and the marketing campaign commenced.
Immediately calls begin to come in, much like before when the property was listed, only this time many more calls. This was in part due to the property now being sub-divided into approx. 5-acre tracts.
The property was to be sold high bidders’ choice, in a multi-par combo format. Meaning the property could sell in individual tracts or in combination, or as a whole. The buyers would determine how they wanted to buy. Pre-Bidding was available online for prospective buyers to place pre-bids as well as watch videos and see photos of the property at www.jdsauctions.com
At 2:00 pm the auction commenced, by 2:45 the auction was over. After 45 minutes there were two buyers left standing. The final bid price for the farm was $268,849 and with an XX% Buyers premium, the total purchase price was $295,733. Using this method, the clients (sisters) are actually receiving several thousand more than they would have even if they would have received a full list price offer.
The auction method is one of the oldest professions in the world. The method works, buyers come prepared to buy. The marketing campaign brought the buyers in from as far away as 3 states.
When you have a property to sell, consider giving us a call, we will explain the process in detail, and allow you to make a decision on what is best for your property.
