What are the benefits of going to auction?
The allure of an auction is familiar to many of us. Auctions are fast-paced, exciting and can produce great results on your property sale.
This guide will give you insight into how an auction works, the benefits and whether it is the right fit for you.
What does going under the hammer mean?
An auction (also known as ‘going under the hammer’) creates a sense of urgency by drawing out interested buyers and bringing things to a head at the auction event.
An auction will keep your property’s value secret to allow buyers visiting the property to provide their estimates on what they would pay for the sale. This gives us insight into what the market is thinking and allows us to stay the course or adjust expectations if required.
If market conditions are in your favour and there is a high rate of buyer interest and competitive bidding on the day than you may achieve a generous sale price beyond your expectations. Properties listed for auction will often sell prior to the auction date, as we will have already shared the story of your property through clever marketing that encourages buyers to take action so they don’t miss out.
How does an auction work?
If an auction is the right choice for your property, your agent will arrange an auction date with open homes leading up to it for potential buyers. The seller (you, with advice from your agent) will set a price with the auctioneer that is the minimum price they will accept. During the open homes, your agent will gauge the price people are willing to pay on a property to get an idea of whether the price was set appropriately.
Your agent will deliver a strong four-six week pre-auction campaign to ramp up interest in your property and extract the right buyers.
An auctioneer will oversee the bidding process on the day. Each bidder is given a number and the reserve price is withheld from them. As bids are made, the auctioneer will keep track of them. If the bidding continues beyond the reserve price, the property is sold at the fall of the hammer on the final bid.
What are the benefits of an auction for my property?
- Auctions give you the opportunity to set specific terms around the sale of your property.
- The pre-auction period makes it is easier to gauge property buyers who are serious about purchasing your property and others that are simply curious.
- You will enjoy greater control over the sale of your property. When offers are made during the pre-auction period, we are able to test these against the market to see what the level of competition for your property is and determine if a greater price can be achieved. This will guide your decision on whether to negotiate, accept or decline pre-auction offers.
- Competition amongst buyers at the auction can help you to enjoy a premium price on your property. Remember, control during the auction ultimately sits with the market, as they will determine if the reserve is achieved or not.
- If you choose to accept a pre-auction offer, you will enjoy a firm sale in a relatively short timeframe.
- By setting a reserve price for auction, you can enjoy peace of mind knowing your property will not sell unless bidding reaches a pre-approved level. There is, however, no set limit on how high bidding can go, so you may achieve a price beyond your original expectations.
If you’d like to find out more about an auction campaign and speak to an agent about the best approach for your property, give us a call on 02 4933 9929 or email firstname.lastname@example.org.
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