Advanced Auction Workshop

• Meeting Objectives– Learn How to Fully Leverage Auctions in Your Market– Increase Successful Auctions

• Increase Listings• Increase Sales• How to Win Every Deal

– Maximize Understanding of United Country Tools– Learn Best Practice Processes

Marketing and PromotionThe Integrated Approach

Agenda

• Auction Marketing Philosophy• Qualification• Project Creative Brief• Marketing Plan Development• Marketing Plan Tactics

– Various Tactics– Multi-Parcel– Multi-Property

• Marketing Plan Execution• Tracking Results• Case Studies• Group Exercise

Auction Marketing Philosophy

• Successful Marketing is the key determinant of auction success

• Auction marketing is accelerated marketing

• Property qualification is the critical first step– Be willing to turn down non-qualifying auction opportunities

• Establishing a process ensures consistent success and increases efficiency

Property Qualification

Step 1. Determine Sellers Fit with the Auction Method

Seller Criteria Number of Owners Ownership Structure Length of Ownership How was it Acquired Capable of Adequate Up-front Marketing Funds Seller Proximity to the Property Relationship with Neighboring Property Owners Relationship with Local Community Seller’s Past Auction Experience Property History of Sales Attempts

Approve Property Salability

Property Qualification

Step 2. Assess Sellers Motivation

Seller Motivation Criteria Why Are they Selling Now? Do They Need to Sell by A Certain Date? How Long has the Property been on the Market? Establish Accurate Monthly Holding / Carrying Costs Identify any Monthly or Annual Maintenance Fees Determine How Long they can Afford Holding Costs Determine Post Sale Plans Seller Current Financial State Attitude to Selling Absolute Establish Sellers Lowest Acceptable Price Sellers Ability to Pay Off Outstanding Mortgage if Necessary

Confirm Proper Seller Motivation

Property Qualification

Step 3. Understand Property Relevant Sales History

Sale History Currently Listed?

If so, How Long has it Been Listed Current Broker

Number, Timing and Value of Any Offers Current Signage All Previous Marketing Executed

Property Qualification

Step 4. Establish Acceptable Price Expectations

Pricing Criteria Current Seller Price Expectation Seller Equity Position Identify All Loans on the Property and Title Possession Ensure Proper Pricing Based on Current Condition and Market Analysis Attain Current Appraisals is Possible (past 24 months) Determine Tax Assessed Value

Gain Pricing Strategy Agreement with Seller

Property Qualification

Step 5. Confirm Detailed Property Information

Final Criteria Current Condition Utilities Status Current Local Market Real Estate Health Legal Considerations: Hazardous Materials, Easements, Access,

Economic Obsolescence, Zoning, Deed Restrictions, Historical Restrictions, Other)

Assess Potential Alternative Uses Annual Property Taxes Agreement to Convert to Traditional Listing Post Auction

No Major New Information Upon Detailed Analysis

Property Dis-Qualification

• Turn Down Disqualified Properties

General Disqualifying Factors Unrealistic Pricing Expectations Long Listing without Price Reductions Overbearing / Hard to Work With Seller Unwillingness to Give Control to the Auctioneer Multiple Past Failed Auction Attempts Seller Prediction of Failure Unwillingness to Provide Adequate Upfront Marketing Funds Seller Unwilling to Fix Bad Condition Issues Determining Seller has not Disclosed Significant Property Information

Other

Project Creative Brief

• The Project Creative Brief is the foundation of any superior auction project

• It clearly explains the why, what, who, where, when and how

• It ensures the auction team is focused, coordinated and efficient

• It reduces required communication and errors

• Projects should not begin without a brief

Project Creative Brief Elements

Background• Any information giving relevant history of the project.• Any important property, category, competitive, company information

that provides insight to the opportunity or why we are doing the project.

• Who is the client, special considerations or information team members need to be aware of, history of the property.

Example:• Property name is Marshy Dream• Privately owned by one family since 1823, the family does not want their

name disclosed in any marketing• One of the best Duck Hunting properties in Missouri• Ducks Unlimited will assist in marketing this property• This is a 640 acre tract with 500 acres flooded.• ABC Realty has had it listed traditionally for 2 years and now the seller

wants to sell it by September 20th to pay estate taxes due October 30th.

Project Creative Brief ElementsObjectives• What are you trying to achieve. The main result you want, as exact as

possible. • Specific, measurable, key date• Include number of buyers, minimum acceptable price, timing

Example:• Sell Marsh Dream for a minimum of $500,000 by September 20th.

Strategies• How will you achieve your objective.• What will you use to achieve your objective. General marketing techniques,

team details, unique approaches

Example:• Position property as the Premier Duck Hunting escape in MO.• Utilize direct marketing , TV advertising and print• Partner with DU• Employ EMS

Project Creative Brief ElementsAssignment• What strategic input is required.

– Examples: Brainstorming, property naming, marketing plan development • What is the output / marketing materials you want.

– Examples: TV Ad, Billboard, signage, brochure, HTML email, website• What physical pieces are needed.

Target• Primary: Describe in as much detail as possible the most likely buyer of the

property.• Secondary: Describe the next most likely buyer.• Tertiary:• Use either past history of similar properties or your / your teams best

judgment

Example• Primary: Male, 50+, Income over $100,000, Urban, Corporate Executive,

Reads newspapers, from California, Oregon or Nevada, active outdoor enthusiast

• Secondary: Male 50+, income over $70,000, personal wealth of over $1,000,000, enjoys hunting and / or fishing, reads outdoor magazines, owns a truck

Project Creative Brief ElementsKey Consumer Takeaway• One sentence, as short as possible, as to what a consumer will say after

being exposed to he project / marketing materials.

Example:• “This is the premier duck hunting property in Missouri”

Prioritized Communication Objectives• Prioritize all key communication points that should be made.• Typically try to keep these around 5-10 key points.• Attach specific copy required in a separate document.

Examples:1. Premier Duck Hunting Property2. Auction3. September 20th, 6pm4. Location and directions5. 650 acres6. Thousands of ducks7. Heated blinds8. 4,000 Square foot luxury lodge9. Sponsored by Ducks Unlimited

Project Creative Brief Elements

Creative Considerations• What do you want the creative artists to consider when

designing your marketing materials?

• Logos required, color suggestions, imagery suggestion, campaign ideas, imagery that the project creative needs to integrate with.

• These are not necessarily mandates, just creative considerations for designers.

Examples:• Use our Office logo and the DU logo on all pieces• Consider aerial photos• Multiple property photos available• Consider showing hunters in the blinds and large quantities of ducks

Project Creative Brief Elements

Timing• Creative Brief to Marketing Team• 1st Round Creative Review:• 2nd Round Creative Review:• Final Approval:• Art Available to Supplier:• Finished Product Delivered:• Marketing Materials Arrive at Consumers• Add any other key dates you need.

• Spending time here, in as much detail as possible will enable you to fine tune future project timing estimates and improve your process and future efficiencies.

Project Creative Brief Elements

Quantity• How many of each item will you need.

Budget• Total Costs itemized as much as possible.

Measurement• How will you measure the results.

You may want to add other categories, but keep it brief.

{Project Name} Creative BriefDate: Project Lead:

BackgroundObjectivesStrategiesAssignmentTargetKey Consumer TakeawayPrioritized Communication ObjectivesCreative ConsiderationsTimingQuantityBudgetMeasurement

Found on Intranet

Marketing Plan Development• The most important activity in determining the success of the

auction

Steps to Creating a Marketing Plan1. Start by reviewing the Project Creative Brief with the marketing

person or team2. Brainstorm on ways to reach each target

• Brainstorm all ideas– Challenge the team to come up with new, innovative ideas – no bad

ideas at this point

3. Estimate number of target buyers reached by each tactic4. Obtain costs of each marketing tactic5. Prioritize marketing tactics by effectiveness in reaching the target

and depth of message6. Establish a marketing budget7. Allocate the budget to the highest priority marketing tactics from

step 5, test new ideas.

Marketing Tactics

• Marketing Plan Tactics– Brochures– Signage– Direct Mail

• Automated Postcards• Confidentials• Purchased Buyer Lists

– Email Advertising– Telemarketing– Internet Advertising– TV / Radio Advertising– Outdoor Advertising– Custom Websites– Print– Co-op and Strategic Partner Marketing– On-line Bidding– Public Relations– Event Marketing

Marketing Tactics ContinuedMulti-Parcel

• Maximize Realized Price by Offering Larger Tracts of Land in Whole or in Parts

• Must Communicate Concept to Potential Sellers and Buyers

• Utilize Existing Multi-Bidding Software Packages (ex; Auction Flex, Multi-PAR, JBS)

• Increase Buyer Pool due to Affordability of Smaller Tracts, Removing Undesired Improvements and Creation of Premium Tracts

• Advertise All Tracts Being Offered

• Consider a Pre-Auction Seminar to Teach Process

Marketing Tactics Continued Multi-Property

• Efficiencies in Marketing can be Realized by Marketing More Than One Property at Once– Shared Marketing Budgets– Shared Event Costs– Shared Contracting Expenses– Immediate Acceptance Approvals

• A Formal Process has been Established and is Available from the Home Office

Marketing Plan Execution

• Timelines– Be Realistic– Excel or Microsoft Project

• Assign Responsibilities• Have a meeting at a minimum weekly to review

the timeline status

• Over communicate with team, seller and buyers on a regular basis

Peak Performance Timeline Example

Tracking Results

• Marketing investments must be measured for effectiveness

• Marketing tactics work differently from auction to auction.

• Continual learning and measurement allows for on-going improvement in effectiveness and efficiency.

• Tracking success criteria should be established before the execution (see Project Creative Brief).

Tracking Process

• Ask All Inquires Where They Learned About the Auction– Keep a Running Count of This Information– Establish a Cost per Lead After All Inquires are Finished

• Survey Final Buyers in Depth About All Marketing They Received– Especially Determine the Pieces That Convinced Them to

Inquire– Gain Their Feedback on All Pieces

• Provide Feedback to the Seller and Marketing Team

Case Studies

Northwoods Resort and Conference Center

Big Bear, California

Background and Overview

• In receivership• Receiver had been operating for 2 years in

order to bring to profit and cash flow back• Had been marketed by 4 commercial firms

for 6 months• Had multiple offers around $7 million• One offer at $8 million (stalking horse bid)

Problems

• $8 million bid had 48 hours to get deposit in

• Receiver went to judge after 24 hours and judge approved the sale subject to a 21 day over bid procedure

• Buyer did not make deposit• They now have no stalking horse bid• Facing a train wreck with the judge

Analysis

• NOI shows the property is only worth about $7 million

• Determined that we would have to find an entrepreneur instead of a hotel chain owner in order to exceed the $8 million the judge was expecting

• Only had 21 days to pull this off

Structure of the deal

• Seller to pay all marketing costs up front• Hire us as a consultant $40,000 flat fee

regardless if the property sold or not• They wanted the property sold but at a

minimum they wanted new players at the table so that in the event that it did not sell, they saved face with the judge

Marketing

Results

• Over 300 inquires in less than 20 days• 8 bidders at the auction• Only one of them had made an offer prior• 4 of 8 were entrepreneurial type buyers • Hotel investors fell out at $8 million• Buyer was a group of 5 partners• Final Price ???• $10,265,000

Montana HideawayTrout Creek, Montana

• Seller built to own not to sell• Lost his money in the tech stock crash• Owed $1 million and needed out• Been on market for 2 years• Listed @ $3m reduced to $2.5m and

finally to $2m by a very good broker in the area (cousin)

• Very difficult sale* Value placed @ $1.5m

Background and Overview

Analysis

• Remote, Comm airport over 2 hrs away, Wal-Mart was 90 miles away and no skiing

• Not known for high end homes• We felt it would be a second home• Because commercial airport was so far

away, thought buyer would own a plane• Most likely buyer would come from WA,

OR, CA, WI, MI or the Southeast

Marketing

Results

• 5 Registered bidders• 2 of them owned their own plane and were

found with direct mail campaign• Preemptive bid placed @ $1,627,500• Sold to CEO of Broadcom a $ multi-billion

tech company

Group Exercise

• Varied Property Samples• Identify Target• Brainstorm Marketing Tactics