You need to sell your home, but can’t figure out what makes more sense: selling through private treaty, or selling at auction. Here are some tips to help you make the right choice, and identify when selling at auction could be the best decision.
Australian home auctions are a popular and effective method of selling your home, and can create urgency among home buyers interested in your property. This can be beneficial to you if you also have an urgency to sell, or there are issues with the home that could make it difficult to move through a private treaty.
The main difference between a private treaty and a home auction is the time limit on selling negotiations. If your property is in high demand, this can mean a selling price that is driven up by competing bidders. However, the reverse can also be true: if your home is seen as less desirable, you can end up with only a few lackluster bids and a poor showing for your trouble.
As a seller, you are also free to consider incoming offers before the auction takes place (except for some mortgagee and deceased estate auctions that may prevent this).
As a seller, you can protect yourself with a reserve price, which is the lowest amount you are willing to accept for your house. You and your real estate agent can arrive at a reasonable reserve price for the open house, by seeing what the bidding strength of possible purchasers amounts to and reviewing the results of any home inspections done. The amount of interest you can drum up in open houses before the auction will be directly related to how much marketing you do. Be aware that even if your house doesn’t sell at auction, you’ll still be responsible for the marketing fees.
You can make a sale before the auction if buyers think bidding will be fierce and want to lock you in. This may prompt a small, private bidding war pre-auction day, and you can take advantage of that to secure a good price and close the deal preemptively.
If you do go to auction and there is low interest, don’t despair if your home doesn’t sell at above reserve price. You can be put in direct contact with the most likely buyer after the auction and negotiate further.
For homes that sell at auction, the sale contract is usually deemed ‘unconditional’, meaning the sale concludes on settlement day with a pre-financed buyer and there is no further need to inspect the building. If your home has been on the market for twice as long as other homes in the area usually last before selling, it could be a sign that an auction is your best bet. You may also see an auction as a best option if you are leery of what various home inspections may turn up.
If you’re in a hurry to sell, an auction offers the best chance of selling by a specific date, and you sell the house as-is, meaning that if there are problems with the house, they will be the buyer’s problem. Unless you agree to an emended contract, the sale is final and the buyer has no cooling off period.
Still not sure whether or not selling your home at auction is the right move? If you think you have a good chance of coming out ahead selling privately, you need a good real estate team on your side. Call Ray White Surfers Paradise today.