Auctions are highly focused marketing campaigns designed to expose your property to the maximum number of buyers, maximise your sale price and minimise the number of days your property is on the market.
Your property is put up for sale on a specified date and this is preceded by a high impact marketing campaign and selected ‘open days’ all of which indicate your commitment to selling.
The contract of sale is on your terms and the conditions of the sale are predetermined to suit your situation. The nature of the marketing campaign means that the agent will be able to give you regular feedback from buyers in the market, which will assist you in setting the reserve price.
The impending auction date can create a sense of urgency and ‘call to action’ amongst buyers. You are not obliged to accept an offer that does not reach your reserve price. You can, however, decide to negotiate with the highest bidder(s).
Auctions offer extra opportunities for the sale of your home because an offer can be made before, at, or after the auction. Once a sale is made, either by accepting an offer in writing before auction day, or at the fall of the hammer on the day itself, the buyer must pay a 10% deposit then and there and at the same time execute the contract.
This method of sale puts a clear time frame on your campaign and creates a competitive atmosphere on auction day that is aimed at letting the market determine the highest price for your home.
Some considerations of this method include:
- The chance that some potential buyers will be excluded, in particular those who don’t want to risk losing money on the cost of building, pest and other inspections if they are outbid.
- Some buyers may not feel comfortable with the competitive bidding involved in auction.
- Auction attracts serious buyers as they know the owners are serious about selling.
- By marketing without a price, buyers can judge the property on its merits, rather than on how the price compares to other properties on the market.