1 October 2019
Going once, going twice, sold at auction?
The thrill, the passion, the excitement. Nothing beats the atmosphere in an auction room on auction day.
At Lugtons, we love auctions and our results prove it. 82% of our auctioned homes sell, with 51% selling before or on auction day, and 28% selling seven days after auction. In this blog we break down the auction process and look at why auctions are a great option for selling your home.
Why go to auction
Going to auction is a great option for many sellers. One of the key reasons behind this is, auctions attract interested buyers. Once the hammer comes down and the reserve price has been met, the sale is considered unconditional. So before bidding, buyers must have all their ducks in a row, from due diligence to finance approval.
Another drawcard is that auctions can tend to drive up the property price, especially if you have multiple parties bidding. And if the highest bid doesn’t meet your reserve price, there is no expectation to sell – plus you still have the opportunity to negotiate.
Auctions are especially effective for people with quality homes in sought-after locations. The auction process focuses on the quality and desirability of the home, rather than the price. Add to this the tension and excitement in an auction room, and your ability to set your reserve – you can see why auctions are a popular choice for many sellers.
How do home auctions work?
- Marketing your property
Auctioned homes are usually marketed for three weeks to help drive demand. Your salesperson will list your property as ‘by auction’ through a mix of digital and offline advertising.
Some sellers accept pre-auction offers, made prior to the day of the auction. Usually this option for purchasing is identified in the sales on the property advertisement.
- Setting your reserve
Prior to the auction your agent will discuss your reserve price, which is the lowest price you would be willing to accept for the property. These amounts go undisclosed to the public but are shared between the owner, real estate salesperson, and auctioneer. Bidders are only told of the reserve price once the property is officially on the market (bids have surpassed the reserve price).
- Bidding on an auctioned property
If you’re buying through auction, you must be pre-register through the real estate saleperson listing the property. This will allow them to send through the appropriate information and legal documentation which needs to be completed prior to the auction.
At the auction, registered bidders put forward the price they’re willing to pay, while the auctioneer works to get the highest bid possible for the property owners. This is also why high-end, location-driven properties are often sold this way – auctions focus on the quality of the property, where price is only a secondary consideration. Which (not-so) coincidentally is why they usually go for above market value.
Other methods of sale
- By negotiation
Selling by negotiation is a another efficient way to complete a house sale. In this process, you set your price (or price range) with your real estate salesperson and let them market your property. Potential buyers will come and negotiate on the price, giving you flexibility in your sale.
This form of selling means you don’t have to accept the first offer that comes along and can negotiate with prospective buyers to get the price up.
Tender-ing your property is an ideal option for sellers who have time on their hands. Why? Because you don’t have to accept an offer you’re not happy with, giving you the freedom to wait for a better one.
Basically, your price is set by the market and what prospective buyers are willing to pay. Offers are then presented to you by your real estate salesperson, for you to consider. You’re in full control of the process.
Looking to sell your property?
If you’re looking to get your house on the market, there are many ways to do so. Auctions are a popular and often quick way to get your property on and off the market, with a price led by your auctioneer to get the highest price. To help you consider your options and what sales method will suit your property, contact Lugtons today. Our team of experienced salespeople are always happy to discuss your property and complete a free, no obligation appraisal. It’s a win-win, or a sold… whichever way you look at it.