Should Auctions Be Listed In The MLS?

Housing markets with staggering inventory could quickly even themselves out if auctions were included in the MLS. That comes from Ben Anderson, chair of NAR’s Auction Presidential Advisory Group.

“Auctions can help us reduce the oversupply of inventory in America,” he told the crowd at a discussion of MLS issues and policies at NAR’s Midyear Meetings. “In an auction, you can sell a hundred homes in a subdivision in an hour and 50 minutes.”

Anderson, a real estate broker and president of Anderson Auctions Real Estate in Destin, Fla., is encouraging NAR to adopt an official policy and guidelines on how MLSs should handle auction properties.

NAR’s Multiple Listing Service Committee is forming a working group to explore all of the angles. (What do you think? Take our blog poll)

Some MLSs already include auction properties in their databases, although they go about it in different ways.

James Harrison, president of MLSListings Inc. in Northern California, said auctions are allowed in his MLS but listings must meet certain requirements. For example, a valid listing agreement must exist, a list price must be entered (starting bid price or range), unconditional compensation must be offered, and some degree of an agency agreement must be in place for the duration of the listing. The property also must be clearly identified as an auction listing, and the type of auction (for example, reserved, absolute, or minimum bid) must be specified.

Geoff Gurney, from the MLS Emerald Coast Association of REALTORS® in Florida's panhandle, said his group has allowed auction properties since 2004. There’s no requirement that a price be listed, but details of the auction event must be provided. Some required fields are: Auction date and location, inspection/preview instructions, and type of auction. The Emerald Coast Association has more information on its Auction Marketing Council Web site.

“Auctions will never replace what we do as REALTORS® in a traditional sense,” Anderson said. “It’s just another method of selling real estate.”

He said the bottom line is that real estate professionals need to be aware of auction listings so they have the opportunity get involved in this segment of the market.