The power of selling at auction this summer

Selling your home at auction could be the best path forward if you need to sell a home fast and the market is competitive.

Build interest

You’ll need to market and advertise your home the same as if you were selling “by owner” to drum up interest in your property. Plan on a budget to be deployed in the four- to six-week period before the auction date, and schedule times for open houses in the week prior to and morning of the event.

Work in tandem with your agent

You and your agent should coordinate efforts and double-check everything before the auction begins. They’ll be in communication with the auctioneer as well, and can confirm details such as:

• Your final “reserve price” (minimum amount you’ll accept for your house)
• The auctioneer’s authority (if any) to make decisions for you if the reserve price isn’t met
• How many bidders are expected, and what bidding increments that will be used
• Which mode of communication you will use during the auction

Set your reserve price
The appraisal on your home will let you know approximately how much it is worth. You can pair this information with data on other recent home sales in the same area, to help clarify how competitive the market is. Once you arrive at a number you feel comfortable accepting as the lowest bid you’d entertain, set your reserve price at that figure.

Don’t tell anyone except your agent and auctioneer what your reserve price is. This amount should be kept strictly under wraps so potential bidders don’t hold off on bidding in the hopes that they can simply pay the lowest cost possible to buy your home.

Sign an agreement

You agent should provide a schedule of procedures prior to the auction. This include when and where the auction will take place, what happens if no bids are received (or your reserve price isn’t met) and what commissions and fees are owed to the auctioneer and the agent.

Having everything down in black and white can prevent unhappy surprises on the day of the auction or afterwards. You may find it preferably to pay a flat fee for your property going up on the block, or a percentage-based commission depending on how much your property sells for.

Sell your property

There are three different ways you can sell your property when you put it up at auction. The most attractive option will depend on your marketing success. If enough people show interest in your home at open houses and before the auction day, you may receive a fantastic offer even before the auction and complete a sale.

Otherwise, you may sell during the auction, hopefully for significantly more than your reserve price, In the best-case scenario, there are several interested buyers who will generate a small bidding war. This can be fun to watch and drive the cost of your home up considerably.

Finally, even if the hammer doesn’t fall when you’re selling your house via auction, you should be put in touch with the bidders and you may be able to come to an agreement post-auction and successfully sell your home.

The worst-case scenario has your house failing to sell at all, and then you’re back to the drawing board trying to find a buyer. At that point, you may want to enlist the services of an agent who will more aggressively market your home, and you may need to come down on the price a little bit.

Need you selling your home independently or at auction? Contact Ray White Surfers Paradise Today.