ALEXANDRIA, Va. – To auction or not to auction?

In light of the fact that real estate is the fastest-growing segment within the auction industry, it’s a question more and more agents are likely to be asking themselves.

"The prime buzzword at the NAR convention was auctions," says Chuck Boles, a Broker Associate with RE/MAX Allegiance and president of the Virginia-based Real Estate Auction Network.

Boles (ABR, CIPS, SRES), an 18-year real estate veteran, merges two passions in his career.

"Many years ago I had an idea: to combine the best elements of the real estate marketing approach with the auction approach," says Boles, a licensed auctioneer since 1992.

He kept the idea in the back of his mind until April, when he approached Co-Broker/Owner Charlie Bengel. The concept: RE/MAX Allegiance – one of the largest RE/MAX companies in the world, with more than 1,300 Associates in Virginia, Maryland and Washington, D.C. – would team up with a collection of auction firms and mortgage and title providers in a unique arrangement.

THE Real Estate Auction Network was born.

"I believe this is one of the only effective business models for auctioning real estate," Boles says. "It creates a mutually rewarding marketing relationship."

THE network consists of six auction firms located throughout Virginia. They work directly with brokers and agents in their assigned territories to market and sell real estate via what Boles calls a blended marketing strategy .

Working as a team, the RE/MAX Associate and the auction company jointly market the property while the title company prepares the bidder’s package and the mortgage company offers a loan commitment letter.

"The RE/MAX Sales Associate receives all the buyer leads, while our affiliated partners have the inside track on the title and mortgage contracts," Boles says.

All parties follow strict guidelines to abide by RESPA, MLS and state regulations.

Boles teaches a three-hour class that Sales Associates and title and mortgage representatives must take to be involved in THE Real Estate Auction Network.

Some people think most real estate auctions involve only foreclosures, but that isn’t the case, Boles says.

"All properties are auctionable," he says, "but some are more auctionable than others."

The key to whether a property is appropriate for auction is the seller, Boles says. The first step in the screening process is for the Sales Associate to evaluate the seller’s loan status, motivation and ability to perform. Then the property’s condition is considered, along with how long it’s been on the market.

"We turn down the majority of applications for auction," Boles says. "Normally it’s not in the seller’s best interest to consider the auction option because the house shouldn’t have been on the market in the first place. It could be that the seller is on the verge of bankruptcy or needs a short sale. Or maybe the property has been on the market for a long time and the listing is shelf worn, or the seller has inflated and unrealistic expectations.

"We don’t put a property up for auction just to have an event. We don’t take properties out of desperation – only out of opportunity."

One advantage to a seller in auctioning a property is that contracts have no contingencies – not for financing, not for inspection, not for anything. The sale must close within 30 days. There are no negotiations; only an accepted or a rejected bid.

Auctions are becoming more and more popular. According to the National Auctioneers Association, residential real estate auctions rose 39 percent between 2003 and 2006. Boles projects that in the coming years, up to 30 percent of U.S. real estate sales could be conducted through auction.