GREC REnews, Vol. 2, Issue 4 (Apr. 2006)

Georgia Real Estate Commission

GREC RENEWS

Volume 2, Issue 4 April 2006

2006 Dates to
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Note
April 25, 2006 Trust Account Class Statesboro Board of Realtors 912-489-7355
May 4 & 5, 2006 Georgia Instructor Training Macon State College 404-252-6768
May 23, 2006 Trust Account Class 400 North Board of Realtors 706-216-5229
GREC Disciplinary
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Sanctions UTH

INSIDE THIS ISSUE:

Auctions

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Tracking Licensees 2

Focus on Terminology:
"Media"
Georgia Real Estate Commission Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605

What You Need to Know About Auctions

Auctions are not just for

distressed properties. In the nineties,

the Resolution Trust Corporation

(RTC) used auctions to move

commercial and residential real estate

assets from failing banks to the buying

public. As a result, many buyers and

sellers realized the auction is a viable

method to move real estate in a timely

and efficient manner.

Auctions have been used as a

method of matching as many buyers

as possible to the sale of a property for

close to one hundred years. Auctions

are another method of marketing.

Traditionally, most auctions are held

on-site, although the current trend is

for bidders to submit offers remotely.

In that case, some argue that the

momentum of the auction is less

effective.

Auctioneers must be licensed

by the Georgia Auctioneers HTU

Commission and the Georgia Real UTH

Estate Commission if they intend to

auction any real estate. Auctions can

be held for personal property as well

as real estate. An estate sale by

auction of personal property may be

beneficial before listing or even

auctioning a house. Commercial real

estate is also actively sold at auction.

As is the case in many

specialties, terminology is specific to

the industry. When attending an

auction, you and your client must

clearly understand the terms as well as

how the property is being marketed

and sold. Usually, the sale does not

permit contingencies to the purchase

other than good title; so the winner of

the bid commits to buying the property.

The following terms are critical in that

understanding.

Absolute: If a property is offered

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"absolute," the property will be sold

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without a set minimum price. In other

words, the property cannot be taken off the

market if the owner does not like the price.

It will sell for the highest of the bids given

at the auction. Often, by advertising

absolute, more buyers attend and the sale

price is higher than those properties not

offered absolute.

Buyer's Premium: Whenever a bid is

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placed, a commission is added to the offer

price to cover the fees to the auctioneer.

The total price the buyer will pay is the bid

price plus the buyer's premium.

By the Tract: Each tract is sold separately

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or it may be announced that the tract will

only be sold as a whole.

Crier of the Bid: The auctioneer begins

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and controls the bidding process so that

the bidding is done fairly and openly.

Ringperson: The auctioneer has

ringpersons who assist the attendees in

making a bid or obtaining information.

With Confirmation: The auctioneer must

receive confirmation from the owner that

the winning bid price and terms are

acceptable.

With Reserve: When advertised and sold

"with reserve," the owner reserves the right

to accept or reject a bid based upon a set

minimum price he/she requires to sell the

property. The minimum bid does not have

to be stated.

A real estate licensee can attend

an auction with a buyer/client and register

the client to obtain a small percentage if

the client wins the bid and subsequently

closes on the property. Some real estate

firms have a separate auction company for

commercial as well as residential sales. A

real estate agent could possibly obtain a

referral fee for sending a seller/client to an

auction company if the property sells as

a result of the auction. When a seller

receives the proceeds from the auction

sale, the real estate licensee can assist

him/her in buying another real estate

investment. ........continued on page 2

Georgia Real Estate Commission
Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605

What You Need to Know About Auctions
continued from page 1.....

Volume 2, Issue 4 April 2006

Sellers who are frustrated with purchase agreements filled with contingencies and extensions to closing may find that in some circumstances an auction is a preferable method to quickly turn assets into cash.

Links to Auction Related References:

Auction Related Definitions

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Rules of the Georgia Auctioneers Commission

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Focus on Terminology: "Media"

Remember that any form of marketing real estate is subject to the

License Law and its Rules and Regulations regarding advertising. The term

media is defined in Rule 520-1-.09 Advertising. Amended.

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"(1) Media. ....The term "media" includes, but is not limited to, print,

photographic, broadcast, and computer media including, but not limited to,

such examples as newspapers, magazines, flyers, posters, business

cards, billboards, radio, television, signs (including, but not limited to,

office, directional, for sale, for lease, sold, or vehicle signs), newsletters,

and the Internet."

A licensee must have written permission to advertise real estate.

Tracking Licensees
The Georgia Real Estate Commission provides a very useful report to assist brokers in tracking and managing licensees affiliated with their firm. The Firm and Licensee Status Report is sent to every firm each year in October and contains the following information:
Information on the license - the firm's license number and its license type (sole proprietorship, corporation, partnership, or limited liability company), active or inactive, renewal date, number of licensees affiliated with the firm, and the total number of licensees needing to renew during the period covered by the report;
Information on the license of the broker or qualifying broker - the broker's name, license number, active status, renewal date, and the total number of any continuing education hours due at renewal;
Trust account information for the firm and its affiliates - for all accounts that have been reported to the Commission, the name of the bank; the account number; and in the case of affiliate's trust accounts, their license numbers;
Affiliated licensees who must complete post-license education during the period of the report and their license type, license numbers, names, renewal dates, and the dates that post license education is due;
The names of all the licensees of the firm who must renew within the quarter including the license number, license type, renewal date, number of continuing education hours due at renewal, and the amount of renewal fees due;
A list of all other licensees affiliated with the firm showing their names, license numbers and types, renewal dates, and any continuing education hours due.
The Commission also sends firms a quarterly status report in any quarter of the calendar year in which the firm, its broker, or its affiliates must renew a license or fulfill education requirements such as the postlicense course.
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