Thinking about Auction?

Sale of property by public auction can be an intimidating process for sellers who are doing it for the first time, yet many see it as the way to achieve the best price.

Most agree that auctions perform extremely well on a rising or sellers’ market and often sellers are surprised at the prices achieved in the competitive atmosphere generated by an auction. Even in a market less kind to sellers, properties that are unusual or sought after tend to fare well. On the other hand, selling at auction needs careful consideration when there are lots of properties for sale and few buyers, as the amount of competition generated may not be enough for a successful auction.

For many, regardless of the market, auction is always the way to sell. After all, the seller has more control over the time frame when the sale date is set in advance.

Most decisions regarding the marketing of a property can and should be determined by a look at the state of the market, the type of property, and the seller’s individual needs. These issues can be best determined by discussing your individual circumstances with the agent you have chosen to represent your interests. Even the location of the auction itself – on-site, in-rooms, other venue - is a decision best made in discussion with the experts who know the facts and figures pertinent to your local area and current market. It goes without saying that a successful sale starts with the choice of agent.

If you decide auction is the way to sell your special property, make sure you give careful consideration to the setting of the reserve price. Research the selling prices of properties similar to yours so you can make an informed and realistic assessment of the potential selling price of your property. If the reserve price is too high, and the property is passed in, many of the advantages of selling by auction are lost, and the price achieved in the long run may well be less than would have been achieved on the day. If the reserve is too low, the price range indicated by the agent to prospective buyers will be lower and the wrong buyers will be attracted to the property.

Interestingly, not all properties that sell at auction actually sell under the hammer. Negotiations begun at auction often continue and result in a sale on the day or soon after. Sellers should discuss this possibility and the accompanying procedure with their agent.