If your thinking of selling your property one of the methods of sale you should consider is selling by Auction.
Selling property by auction has been around for over 150 years in Australia and it is a tried and true method however the auction process does not suit all properties and all owners.
At First National Nerang we are not an “auction at all costs” real estate agent who pushes auction as the preferred method of sale. Some agents try and auction every listing they get simply to avoid discussing market value with a seller till the actual day of the auction.. First National Nerang provides sellers with information on all the methods of sale and assist them to make a decision on which is best for them.
First National Nerang understands that the successful handling of a property Auction requires strategic process to be followed throughout the course of an Auction marketing campaign to maximise the success.
Prior to the Auction
First National Nerang will provide you with a well researched and recommended market appraisal and marketing campaign. One of the biggest reasons for failure with an auction is the unrealistic expectations of the seller. An auction campaign when done professionally should achieve a premium price for a seller but it can never achieve an unrealistic value.
A seller should always consider the marketing investment required against the probability of an unsuccessful auction at all times but particularly when the price the seek is substantially outside that of the agents comparative market appraisal.
The Agency Auction Agreement
Selling by auction is an exclusive agency agreement and requires an exclusive agreement documents to be provided. The auction process requires the seller to pay the agent to arrange effective marketing and advertising plans to maximise exposure of the property and the auction date to potential buyers.
Before the Auction
Similar to any other sales method First National Nerang will arrange for an advertising campaign to gather interest from potential buyers. Marketing campaigns could include print media such as the Gold Coast Bulletin, real estate websites and eMarketing promotion. The primary different between an auction campaign and
Your agent will also arrange for a number of open house inspections — set times when anyone can come into your property to look around. Your agent should keep a log of all people entering the property on each of these occasions so they can ascertain how many are repeat visitors. People who inspect more than once are often showing a genuine interest as a potential buyer.
Also of importance is the professional handling of each buyer and the systems to provide accurate and regular feedback to the sellers.
Auction day arrives
A successful auctioneer is very professional and experienced and may auction many properties in the same day for many offices.
Before the auction starts, the auctioneer will often arrange one last open house inspection. At this time, at least 30 minutes before the beginning of the auction, your agent is required by law to display certain documentation at the location of the auction. The auctioneer must also make a general announcement before the auction starts detailing this information.
Documentation required is:
- documents detailing the laws applying to auctions in your state; and
- the rules applying to this particular auction, including whether vendor bids and/or co-owner bids will be used.
The auction often starts with the auctioneer asking for an opening bid. They will then set an amount by which all bids must rise, such as in increments of $10000.
Bidders can offer an alternative amount, such as $5,000 or even $1000. Accepting a low increment is always up to the discretion of the auctioneer.
Once the property’s reserve price has been reached it is considered to be ‘on the market’ and will be sold to the highest bidder. If the reserve price is not reached, the auctioneer will confer with the seller to determine whether they are happy to sell at a lower price.
When the final bid is reached and the seller is happy with the price, the auctioneer will announce “going once, twice, three times. If no more bids are offered then the auctioneer will knock down the sale to the highest bidder and call “Sold”
A deposit is always required immediately at auction unless approved prior by the auctioneer. This deposit is usually 10% of the purchase price. The balance of the sale price is paid on settlement which is normally 30 days later or as instructed by the auctioneer prior to the auction.
When is the Property Sold with an Auction?
The sale is finalised when the contract has been signed by both seller and buyer and all relevant cheques and transfers have been made. Once this has been completed and the balance of the purchase price paid, the property is officially considered sold.
Originally posted at the : Nerang First National Blog