These days, more and more West Australian’s are choosing to sell their property via auction. After years of debate throughout the real estate industry we are finally seeing numbers in WA rising, suggesting that sellers are starting to see the value of this selling method. Arguably, the reason auctions are such an effective way to sell your home is because sellers are committed to making an immediate sale, often increasing interest from potential buyers.
Generally, when it comes to selling your property, your Agent will typically present you with three different selling options; private treaty, tender or auction and their recommendation for your property. There are few statistics or rules that dictate what type of property is more suited to which type of sale, but if you have a feeling an auction would work well for your property, then there are some aspects to consider.
Essentially, when it comes to auctions, you set a reserve price with your Agent and the Agent conducts the auction on a particular date on your behalf. If bids don’t reach your reserve price, then your Agent is able to negotiate with the highest bidder to reach a conclusion or withdraw the property from sale.
While it can be hard to let go of control, especially with something as big and personal as your home, it is important to leave auctions to the professionals! They are usually conducted by real estate sales associates acting as an Auctioneer, governed by strict regulations. Not only are there strict rules for how an auction should be run, there are also rules for how people attending should behave, with substantial penalties enforced if regulations are broken.
There can be many benefits to selling at auctions:
There is no sale price limit when it comes to auctions. Your property is worth what buyers are prepared to pay for it on the day!
The seller sets the terms and conditions of the sale for an auction so they are always in control.
Protection for the seller
The seller is protected by the reserve price. This figure is determined carefully between the seller and Agent and the property will not be sold for less.
Sense of urgency
Genuine buyers will have typically viewed the house within the first 2 weeks of marketing. As auctions have a strict timeline, interested buyers are forced to take prompt action.
Exposure through Marketing
The property is usually held exclusively by one Real Estate Agent for a fixed period of time during which marketing of the property is intense and very effective in attracting interest.
Not 1, but 3 chances to sell your property
Before the auction- buyers have the opportunity to approach the Real Estate Agent prior to auction day with an expression of interest.
On auction day- if the reserve price is reached.
After auction- if the reserve price is not met, the Real Estate Agent will contact the highest bidder for further negotiations.
When it comes to holding a successful auction, there are some factors that should be considered:
Selecting an Auctioneer
Obviously, the Auctioneer will play a key role in the success of your sale, especially if there were to be only one or two bidders attend the auction on the day. Before you choose which Auctioneer for your property, it is best to see several Auctioneers in action before you make your final decision. It is also suggested you ask potential Auctioneers about their auction experience, their strategies to get the best price for your property, and their knowledge of the local area.
Setting a realistic reserve price
In the days leading up to the auction, it is important you remember to come up with a final reserve price – the lowest price you are willing to accept for your property. Pre-setting this figure will help to ensure you don’t end up negotiating your final reserve at auction time when pressure and emotions are high. Your chosen Auctioneer will help you set a realistic reserve. This number should not be discussed with anyone other than your Auctioneer to help ensure you don’t lose out on a higher price.
When it comes to paperwork, it is important to make sure you have the contract and seller statement available well before auction date. As mentioned above, there is always the chance that a property can sell before auction and therefore, having everything prepared in advance will ensure you do not have to stress over these finer details in the days leading up to the auction.
Auctions can be a fast, effective and profitable way to sell your property. The most successful auction campaigns in WA often achieve sales figures well above the property owner’s expectations. They have the potential to generate a high level of interest and in turn, create competition amongst potential buyers.