21 Sep Selling at Auction with Jacqui & Jay
When selling your property, there are quite a few different modes of sale you can opt for. When it comes to the choice of selling your home through the auction process, the choice will be largely dependent on your country, and the type of property you have.
Higher end and luxury properties are often sold through auction due to the nature of Australian and New Zealand auctions focusing on the quality of the property, with price being the secondary concern. In this environment, keen bidders can drive the price of the property above market expectations in some cases, with no pressure to sell if the property fetches a lower than expected bid.
Another benefit to selling at auction, is that you will attract genuinely interested buyers. In Australia and New Zealand, those bidding at auction must do their due diligence before bidding. This means the contract of sale is not subject to inspections or finance – as these must be organised before auction day and ensures only serious buyers will show up to bid.
Once you’ve decided on auction for your property, how can you ensure you’re best prepared for the day? To help you, we’ve gathered a list of considerations and frequently asked questions from Harcourts top auctioneers.
Before the auction
Auctioning your property is about so much more than simply showing up on auction day. There’s a lot that goes into it before-hand to ensure you achieve the best result possible for your property. Marketing your property well is chief among the things you’ll need to do.
Your agent should walk you through your marketing plan in detail, from the images that’ll be selected and advertised, the copy that will be included, to where the property will be advertised (online, papers, brochures, in office).
Before you go to auction, you should expect to hear from your agent on a daily basis and a face-to-face meeting around once a week. Ideally, you’d receive a written report which summarises all of these activities as well as the interest in your property.
Your agent should also be keeping you well-informed of the market, so that you can make the best decision come auction day.
What is your role on the day?
If you’re in the country, the best recommendation is to attend your auction. It’s great to have you there if there are any last minute questions. Some common ones buyers ask are:
“Can we vary the deposit amount?” or “Can we vary the settlement date?”
Your auctioneer will also want to confer with you depending on how the auction is going. If bidding stops below your reserve price for example, your auctioneer will want to discuss next steps with you.
Getting to know your property
The auctioneer should be introduced to your property, much as your agent has been. They should walk through the property, understand the features of the home, and really understand why a buyer would fall in love with it. That way they’ll be able to better represent your home to buyers.
Your auctioneer will also want to know all about the interest the property has received. They’ll ask your real estate agent detailed questions about it. How many inspections have there been? What kind of interest has the home received? Have any valuations been done? Any building/pest inspections?
When it comes to marketing your property before auction, the rule seems to be more is more. The success of your auction can be largely dependent on your marketing campaign. The latest research from Harcourts Group Australia, showed a direct correlation between the amount spent on marketing versus how much interest was generated for a property, and what price it sold for. On average, properties that sold in the shortest timeframe invested a further AUD$1,913 in marketing than those that did not see a sale in the 45 day period.
The reserve price
It’s important for you to understand and be clear on what your reserve price is, and how it’s used during the auction. Your auctioneer should be able to explain this to you in detail. You will need to discuss your reserve price with your auctioneer. They should be working to ensure you get the best price possible for your property.
That being said, try to avoid openly discussing price with others, to reduce the risk of price leaking out into the market. The auction should focus on the product (your home), and price should become secondary.
Harcourts Auctioneer, Chris Kennedy believes there are three types of figures to consider before the day:
- Your happy price – The figure you’d be very happy to accept.
- Your ok price – The figure you’d be ok with based on the feedback you’ve received, you don’t see a win but you don’t see a loss.
- Your grumpy price – This last figure is basically the one you wouldn’t be thrilled with, but given market conditions, you’re prepared to unhappily sell at that price.
Remember, at all times during an auction, you’re in control. If a bid is high enough take it. If not, don’t. But the reason for not taking the offer needs to be greater than the reason the home is on the market in the first place.
Chris discusses the auction process in New Zealand in the following clip.