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Why Major Enterprises, Inc.

Major is a dedicated team consisting of approximately 600 highly skilled real estate professionals. Among our agents we have attorneys, CPA's, appraisers, developers, marketing and project managers who together create a fully integrated auction program for our clients. Our comprehensive marketing and promotion program reaches not only many buyers, but also approximately 65,000 real estate agents in the State of Illinois. Through our databases, Major reaches Illinois Realtors by hard copy mailers sent out in sorts of 10,000 every two weeks, and email broadcasts on weekly bases to about 47,000 Realtors in the State of Illinois via the Internet. Our unique approach to auctions includes placing auction properties on the MLS (Multiple Listing Service) where those properties get maximum exposure and reach the greatest number of potential buyers. Attention to detail, meticulousness of preparation, and our proven strategies are the principal drivers that allow our clients to sell their real estate holdings for the maximum return.

To put our advantage to work for you, contact us by email:info@majoronline.com, call us at (800) 405-6992 ext. 3379, or fax 847-268-3444.

An auction is the process of buying and selling goods by offering them up for bid, taking bids, and then selling the item to the winning bidder. In economic theory, an auction is a method for determining the value of a commodity that has an undetermined or variable price.

Auctioning can be traced as far back as 500 B.C. Auctions can be with reserve or minimum, or without minimums, or absolute or no reserve. In reserve auctions, there is a minimum bid or reserve price; if the bidding does not reach the minimum, there is no sale. In absolute or no reserve auctions, the sale is guaranteed, with only the price left to be determined. In the context of auctions, a bid is an offered price.

According to ancient Greek scribes, the more generally accepted auction occurred first in Babylon in 500 B.C. During this period, auctions were held annually, and women were sold on the condition of marriage. It was considered illegal to allow a daughter to be sold outside the auction method. Women with ?beauty? engendered higher bidding, women without ?beauty? had to pay a dowry to be accepted into the auction, and thus the price would be negative.

During the Roman Empire, following military victory, Roman soldiers would often spear the ground to mark the location of spoils in which goods and property were seized. Roman business agents were said to have accompanied warriors into battle to help facilitate expected sales. The Romans also used the auction to liquidate their own property. For example, Marcus Aurelius is said to have auctioned off prized heirlooms and furniture, (an auction that, as legend has it, lasted over two months). The most legendary auction occurred in the year 193 A.D. when the entire Roman Empire was put on the auction block by the Praetorian Guard. On March 23rd, The Praetorian Guard first killed Pertinax the emperor, and then announced that the highest bidder could claim the entire Empire. Didius Julianus outbid everyone for the price of 6,250 drachmas per Guard, an act that initiated a brief civil war. Didius was then beheaded two months later when Septimus Severus conquered Rome.

During the 17th century, soon after the French Revolution, auctions came to be held in taverns and coffeehouses to sell art. Such auctions were held daily, and catalogs were printed to announce available items. Such Auction catalogs are frequently printed and distributed before auctions of rare or collectible items. Many of these catalogs may be very elaborate works themselves, with considerable details about the items being auctioned.

During the American civil war, goods seized by armies were sold at auction by the Colonel of the division. Thus, some of today's auctioneers in the U.S. carry the unofficial title of "colonel". Auctioneers are usually trained in the legal and practical aspects of conducting auctions. Some jurisdictions require auctioneers to be licensed and bonded.

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Primary Types of Auctions

English auction: This is the type of auction commonly used by the English auction houses. Participants bid openly against one another, with each bid being higher than the previous bid. The auction ends when no participant is willing to bid further, or when a pre-determined "buy-out" price is reached, at which point the highest bidder pays the price. The seller may set a 'reserve' price and if the auction fails to have a bid equal to or higher than the reserve, the item remains unsold. A variant popular in the time of Samuel Pepys was 'auction by candle' in which the winning (highest) bid was the last one to be made before a small piece of lit candle died out.

Within this type of auction, there are several ways in which bidding can occur. First, is the absolute auction, which means that the item will be sold for the highest possible price, with no reserve. Second, is a reserve auction, which establishes a minimum bid or price for the item that will be accepted by the person who is selling the item. Third, you have Absentee bidding, which means that a bid is left with the auctioneer. Fourth, is internet bidding, where the bidding can be online and at the auction house at the same time. Fifth is Phone bids, which is nearly identical as absentee bidding, but an auction house employee does the bidding for the buyer. And last but not least is the sealed bidding process.

Chinese auction: A Chinese auction is a type of auction (actually a combination of auction and raffle) that is typically featured at charity or other fundraising events. Other groups have named it tricky tray or pick-a-prize to avoid any possible racial overtones.

Dutch auction: In the traditional Dutch auction the auctioneer begins with a high asking price, which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined minimum price is reached. That winning participant pays the last announced price. The Dutch auction is named for its best known example, the Dutch tulip auctions. ("Dutch auction" is also sometimes used to describe online auctions where several identical goods are sold simultaneously to an equal number of high bidders. Economists call the latter auction a multi-unit English ascending auction.)

Sealed-bid first-price auction: Also known as Sealed High-Bid Auction or First-Price Sealed-Bid Auction (FPSB). In this type of auction all bidders simultaneously submit bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted.

Sealed-bid second-price auction: Also known as a Vickrey auction: This is identical to the sealed first-price auction, except the winning bidder pays the second highest bid rather than their own. This is very similar to the proxy bidding system used by eBay, where the winner pays the lesser of their actual bid and the second-highest bid plus one bidding increment.

All-pay auction: An auction in which all bidders must pay their bids regardless of whether they win the prize. The highest bidder wins the prize. The all-pay auction is often used to model lobbying (bids are political contributions), or other competitions.

Silent auction: This is often a variant of an English auction, where bids are written on a sheet of paper, and at the predetermined end of the auction, the highest listed bidder wins the prize. This auction variant is often used in charity events, and many items may be auctioned simultaneously. Participants submit bids normally on paper, near the item. Other variations of this type of auction may include sealed bids. The highest bidder pays the price he or she submitted.

Digital art auction: In this indefinitely long auction, designed for unreleased works that are trivially reproducible at zero cost (recordings, software, drug formulas), bidders openly submit their maximum bids (which may be adjusted or withdrawn at any time). The seller may review the bids and close with a price of their choosing at any time - the successful bidders that pay this price are those whose bid meets or exceeds it, and these are the only bidders who receive a copy of the item.

Open outcry auction: This type of auction can refer to any auction where the auction is conducted orally for people to hear. This type of auction also refers to what is used in stock exchanges and commodity exchanges, where trading occurs on a trading floor and traders may enter verbal bids and offers simultaneously. Transactions may take place simultaneously at different places in the trading pit or ring. This type of auction is being replaced by electronic trading platforms.

Unique bid auction: In this type of auction users post blind bids and are given a range of prices they can place a bid in, often a capped limit. The highest, or lowest, unique bid wins. For instance an auction is given a maximum bid of 10. If the top five bids are 10, 10, 9, 8, 8 then 9 would be the winner being the highest unique bid. This is a popular online type of auction.

Buy-out auction: This auction has a predetermined buy-out price in which the bidder can end the auction by accepting the buy-out price. The buy-out price is set by the seller. The bidder can choose to bid or use the buy-out option. If no bidder chooses to utilize the buy-out option, the auction ends with the highest bidder winning the auction.

Combinatorial auction: A combinatorial auction is an auction in which bidders can place bids on combinations of items, or ?packages,? rather than just individual items.

Absolute auction: Also known as an Unreserved Auction, No-reserve Auction or Auction Without Reserve, is an auction with no minimum bid amount, no set starting bid, no seller confirmation of the high bid price, and no buybacks of the property being offered by the seller of any agents of the seller. The highest bidder will purchase the property no matter the high bid price. This type of auction is designed to attract the maximum participation from the buying public as the seller has committed to convey their property to the highest bidder without limitation. It does offer buyers excellent opportunities from time to time, however. A 2003 Virginia statute defines an absolute auction as "an auction where at the time of the auction sale the real or personal property to be sold will pass to the highest bidder regardless of the amount of the highest and last bid."

Reverse auction: A type of auction in which the role of the buyer and seller are reversed, with the primary objective to drive purchase prices downward. In an ordinary auction (or also known as forward auction), buyers compete to obtain a good or service. In a reverse auction, sellers compete to obtain business.

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Common Uses for Auctions

According to the National Auctioneers Association $257.2 Billion of goods and services sold at auction in 2006. The National Auctioneers Association expects residential auctions to balloon to 30 percent of all sales by 2010.

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Auction Benefits

• Auction benefits both sellers and buyers
• Auction method allows for taking a survey of the market, because the property value is set by willing, ready, and able buyers at the time of auction
• Auction creates competition among buyers who drive the property value
• Auction allows to pre-qualify buyers, since in order to bid, they all have to bring substantial certified funds and enter into purchase contracts that are not contingent
• Auctions reduce the number of property showings that typically would inconvenience a seller if the property was sold via a traditional negotiated method over a long period of time
• Auction generates a demand and is especially effective in a slow real estate market
• Auction reduces the wait time to sell a property

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Benefits to the Seller

• Buyers come prepared to buy
• Quick disposal reduces long-term carrying costs, including taxes & maintenance
• Assurance that property will be sold at true market value
• Exposes the property to a large number of pre-qualified prospects
• Accelerates the sale
• Creates competition among buyers - auction price can exceed the price of a negotiated sale
• Requires potential buyers to pre-qualify for financing
• The seller knows exactly when the property will sell (the date of the auction)
• Eliminates numerous and unscheduled showings
• Takes the seller out of the negotiation process
• Ensures an aggressive marketing program that increases interest and visibility
• A faster sale allows the seller to reinvest the sales price sooner
• Seller controls the terms and conditions of the sale
• Property sells ?as is - where is? , with no war