Are you planning to sell your house, but dread the thought of months of estate agents coming around with potential buyers, and deals falling through at the last minute? Selling at auction is a great idea if you want to sell your house as quickly as possible.
The advantages of an auction for sellers include
- No price limit – good for properties that are unique, in short supply
- The property will be sold if the reserve price is reached
- The property will be sold on a specific date – potential buyers have to reach a decision and act quickly
- Suitable buyer(s) can be identified to negotiate with if a sale is not achieved at auction
Certain types of properties are much more suitable for sale at auction. These include houses that would be hard to sell by traditional means, for example, they could be in need of significant renovation and investment or properties that are in high demand. In these cases, selling at auction may be a good idea, as much higher price may be achievable in the heat of a bidding war.
Do you have the right agent? You need an agent that you trust and in whom you have confidence.
Consider the prospective agents’ personalities, experience, sales record (evidence of success in your area) and professionalism.
Ask the agents to outline their proposed marketing plan – this will give you a good idea of their approach to achieving your sale and the likelihood of success.
You may receive offers prior to the auction. Do not feel pressurised to accept such offers which do not meet a realistic expectation of what you should receive at the auction. Listen to the feedback received from your agent on the level of interest being expressed in your home, and remember that anyone offering prior to auction day should expect to have to pay a premium to avoid the competitive bidding situation at the auction.
Don’t despair if you receive no bids on the day – this can happen despite the best efforts of your agent. Many properties that don’t sell on auction day will land up selling after the auction.
Even at auction, there is the potential for the sale to fall through due to financial reasons. Ensure that your agent vets potential buyers who express interest prior to the auction in order to mitigate this risk.
Don’t bid the price up – either yourself of through friends. Most auctions limit vendor bids to two, and these should be made by the auctioneer. Other things to avoid include revealing your reserve price or your expected selling price – you may scare away buyers.
Listen to the feedback from your agent in the run-up to the auction, and set the reserve price accordingly. Too high and your property is likely to attract no bids on the day.
If your received bids on the day, but your reserve price was not reached – remember that the highest bidder has the right to negotiate, so don’t rush to put the property back on the market immediately.