I get it. You're an owner and it's time. Time to put your beloved home or strongly planned investment onto the market for sale. Price is paramount. You've met with a few agents in the area. You've received their appraisals...but there's two methods of sale they're recommending. What's best for your property?
Let me highlight some positives to choosing auctions as your method of sale:
- You have some certainty around when the house will sell, set auction date (unless it is passed in)
- Competitive bidding amongst multiple buyers means no upper price barrier;
- A defined campaign period (usually four weeks)
- A sale at auction is unconditional;
- Inspections are controlled through open house days or appointments
- It gives the agent multiple negotiation opportunities to achieve the best result
If you are considering selling your property at auction, here are some helpful tips that can improve your chances of an outstanding result.
The auction process begins when the seller signs an authority (POA - Form 6) with the agency that gives permission to take the property to auction. This process also involves the sellers signing off on the marketing plan presented by the agent, which is absolutely key to attracting potential buyers. You want big attendance levels on auction day, so you want widely reached campaigns.
Whether the house is sold at auction or not, the seller will usually pay for the agreed marketing costs separate to the commission, (unless otherwise negotiated at the time of signing the contract).
Sellers should also take note of the agent’s credentials as only licensed real estate agents and auctioneers are trained to sell real estate and those who are members of the REIQ are bound by our Standards of Business Practice.
Once the listing authority is signed, there are three key periods in the auction process.
The first is the period prior to auction day, when the marketing campaign begins, with advertising placed and open houses scheduled. It is advisable to have as many appointments or open days as possible (even though this can get tedious) as this is the key to attracting bidders at the auction.
Next, is the auction day itself. At this stage the seller will have a reserve price ready to pass to the auctioneer on the day of the auction. The reserve price is usually set using a comparative market analysis and in discussions between the agent and the seller.
If the highest bid reaches or exceeds the reserve price, the property is sold ‘under the hammer’ (i.e. - at auction) and the Contract of Sale is signed immediately by the buyer and the seller.
Should bidding not reach the reserve price the auctioneer will look to the seller for further instructions before ‘passing the property in’ (i.e. – not selling under the hammer). At this point the seller can reconsider the reserve price.
If the property passes in, the real estate agent will usually follow up all enquiries made before and after the auction day and continue to promote and market the property endeavouring to achieve a sale as soon as possible.
My role as an auctioneer is to sell your property on the day. At worst, I leave the property more sellable for you & your agent. Which normally results in a negotiated result very shortly after. #wicktick