Alley Auction | Learn more about David Alley of Alley Auction
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Est. 1966 | Seller of Fine Estates at Auction

David’s Story

David Alley talks
about “the first time”

AlleyDavidIn life it seems that lessons are best learned by actual experiences rather than taught. My introduction into the world of real estate auctions was not only a life lesson but, one that would influence my career as an ambassador to the art that I love “selling at auction.” So here is my story and it is a good one… of heartache, financial struggles and a very happy ending all in the span of 30 days.

As a 22 year old rookie in the real estate business, I thought I had things pretty well figured out. In fact sales came very easy to me, it was a natural extension of my personality.

That confidence inspired me to invest in my first real estate investment…a small commercial lot I purchased for only $15,000. This property was located in a busy sector of Knoxville Tennessee. I thought it would be an easy resale and a quick profit. Two years later, and another 24 payments I realized I was wrong, very wrong. My investment was holding me hostage! Disappointed, my confidence shaken, I just wanted out. As we all know real estate just does not work that way. Time was not on my side. Frustrated I began to search out people I knew in the industry who might be able to help me. Then one day merely by being in the right place at the right time, I observed a commercial real estate auction in place. I watched in amazement as in the period of 20 minutes over a million dollars of land was being sold. The following week, I paid a visit to the proprietor of this auction, Oliver Smith. He was very cordial on our first visit as I told him about my frustration with my real estate investment. The visit was quite informal and only lasted a short time when he asked me to come back tomorrow at the same time when we would discuss my problem.

Caught April 21, 2016, from lake on the Crawley Estate property.

Caught April 21, 2016, from lake on the Crawley Estate property.

The next day I revisited his office. He had me come sit next to his desk where he had assembled a large portfolio of papers. The papers included surveys of my lot, aerial photographs of the site, traffic counts, names and phone numbers of adjoining property owners, taxes and payments. In the course of one day he had assembled more information on my real estate that I had myself. He then proceeded to tell me that if I wanted to sell this real estate the best method would be to sell at auction. My reaction was normal and I remember my expression was something along the lines of “are you crazy I’m not giving my property away”. He then proceeded to point out the negative items that had been a detriment to selling this property. He pointed out how the property had no curb appeal and needed to be cleaned up. How the property needed to be resurveyed to establish boundaries. Then he proceeded to ask me specific questions of marketing. Who was my client, what were their needs? What income bracket would support the purchaser” Was my note assumable, was there a due on sale clause, terms of the note, etc.? Like a doctor would look at a patient, Mr. Smith was analyzing the patient and summarizing what a solution might be. In other words he was solving the problems and creating the solutions. In the next hour and a half, I experienced one of the most fascinating intellectual conversations in my life… devoted to creating developing and branding and selling real estate at auction. By the time we concluded that meeting I understood and was compelled to react and try my first real estate auction with my own real estate.

The next 3 weeks were a blur. I became, as Mr. Smith would later say, a candidate running for office, a preacher starting a congregation, a football coach leading a team. Signs went up, property was cleaned, new survey marked and staked. And a complete marketing campaign was implemented. Every part of his plan was detailed…as he said…a perfect recipe for success. I worked tirelessly writing personal letters, hand delivering brochures, meeting with clients in their office and so on. After 3 weeks the day had finally arrived it was “auction time in Tennessee”.

We arrived on site one hour before the auction was scheduled. What was unusual about that day, was the very clients that I had solicited for over 2 years, who had never indicated any interest in my property, started to arrive. The sale begin, the open announcements were made and at the hour of twelve noon, Mr. Smith asked for an opening bid. The bidding begin and was opened at $15,000. It quickly escalated to $20,000. At which time, Mr. Smith calmly turn to me and asked me if I would accept that offer. This was an auction by confirmation in which I had the right to accept or reject any and all bids. The Bids had come at such a quick pace that I had no idea we had already exceeded my asking price. I told Mr. Smith “yes I was confirming the sale”. The Biding had really just begun. Mr. Smith continued the sale from 21 – 22 – 22 – 23 from 23 to 24. Each time another thousand dollar bid was made, it was as if the angels were looking down from above. We continue from 24 to 25 to- 26, 27, 28, finally we concluded at $29,100. I was speechless, dumbfounded, totally clueless as to what had just taken place. One thing I did know as I collected myself and watched the cars driving away from my auction, I had just become convicted and convinced beyond any measure that this was a phenomenal method to create equity. Later that day I sat and had lunch at Mr. Smith’s office, he asked me in his soft-spoken Southern gentleman way me what I had learned today.

“What A great way to sell real estate, Mr. Smith,” I replied.

“No, what you learned is a very simple formula, he said, if you give people what they want and a way for them to buy it, then they will reciprocate every time. In other words you create the market, don’t expect the market to come to you.”

Lesson learned and wonderful way to start a career. I will forever be indebted to this wonderful man that introduced me to my passion in life.

DavidAlleySig

 

 

 

 

David Alley

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