If you can stand the uncertainty and jitters surrounding the lead-up to auction day, you will likely be able to sell your home for significantly more money than if you accept a private treaty offer. Not everyone has the nerve or ability to accept the stress of unpredictability, though; at least 16.5% of all homes for sale in the first half of 2021 sold to offers ahead of auction day — an increase from 10.5% as of January, reports Domain.
While it gives you the time to consider offers and negotiate specific terms, the certainty afforded to homebuyers selling via private sale doesn't always pay off. According to our colleagues at Ray White Victoria, those who sold at auction in the first six months of 2021 were able to command 12 to 14% more than their best offer ahead of the auction.
There are a few areas to be aware of heading into an auction so as to capitalise on today's strong seller's market, though. Here's a look at how to maximise your opportunity.
The more effectively you market your property — the better story you tell about your home — the higher the price you're likely to command on auction day. Why? To answer, we can turn to the many ways psychology influences what we value. Many people will value something — any object, from a chair to a house — the more they feel emotionally invested. So if someone can visualise their family living in your home, truly envision living out the daily grind there, they are likely to value it more — emotionally and in dollars.
High-quality photos and good copywriting will help increase interest among prospective buyers. To this end, you might consider discussing staging options with your real estate agent to ensure you are creating images that will help potential buyers really "see themselves" in your space. It's particularly wise to have a very open, candid conversation with your agent about the appearance of your home; many homebuyers may not share your same taste in decor. But agents will have a good sense of market preferences and be able to identify what can be done to maximise value.
Stand against underquoting
You want to make sure you are attracting the right population of potential buyers on auction day, not mislead a crowd. To do this, it's key to set a fair, reasonable reserve price.
When markets are hot, as now, it's easy to wonder about underquoting or the deliberate and illegal practice of agents publishing a price guide below the reasonable upper limits of what a home is expected to command at auction.
In today's fast-moving marketplace, though, it is difficult to prove underquoting. Could it be that excited sellers in a market with low supply — and easy access to low-interest loans — simply bid up a price above reasonable expectations? Many say yes, and that's why underquoting is difficult to prove.
But it won't do you any favours.
Our team at Ray White Surfers Paradise is committed to marketing your property to its full potential and ethically helping you maximise your opportunity. Contact us today to discuss how we can help.