Advantages of Selling Your Home at Auction
There are three well-known strategies that you can use to sell your property; you can decide sell privately, sell by auction or sell through general expressions of interest. The choice of which method you use is determined by several factors but before you go ahead with any one method, make sure that you do your research first and then decide upon an approach that works for you and that suits your situation or you could end up losing out big at the end of the day.
Below are just some of the factors to consider before you decide upon any one method. If you have any questions in regards to what selling approach or method to take, contact our team of experts first.
- The Kind Of Property That You Are Looking To Sell.
- Its Location.
- Which Real Estate Agent You Choose.
- The Current Real Estate Climate In The Area.
- How Much Time You Have Allowed Yourself To Sell Your Property.
Right now, the number of people selling privately makes up about 1% of the market. The reason why there is such a mall percentage of people who choose to sell privately is that they simply do not understand the process and agents tend to put sellers off the idea as it is not in the agents interests to suggest this method of sale. The most common method of property sales in Australia are tender based sales or auctions as sellers can potentially attract more from the sale of their home as they have multiple bidders bidding against each other all in the one place. But, how do auctions work? Let’s look at how they work and the pros and cons associated to selling by auction.
HOW PROPERTY AUCTIONS WORK
One of the greatest things about property auctions is that they can be used to sell all kinds of property and they attract immediate buyers, there are no long drawn out processes, you simply have your buyers turn up on auction day and should all go well, you’ll have yourself a buyer by the end of auction day.
The idea is to make sure that you have as many people interested in the property as possible, get them in the one place and let them fight it out for the right to buy your property.
You can do this by generating loads of interest in your property using the following methods:
- List Your Property For Sale Online
- Featured Listings Online
- Professional Photography
- For Sale Signage
- Property Flyers / Brochures
- Mail Outs To Buyer Databases
Flyers may not attract actual buyers but they will bring locals to the auction which will increase the buzz on auction day and hopefully, help you to get a higher price. Some FSBOs and agents will help you to conduct buyer mail-outs which are generally facilitated through realestate.com.au or through your local agency’s own database.
Regardless of all of this, you’re job is to get as many interested parties in the one place at the time of the auction so don’t leave any stone un-turned in your efforts to find as many potential buyers as possible.
You need then need to hire an auctioneer obviously. You can hire one independently or you can pay a real estate agent to manage this process for you. You don’t have to use a real estate agent unless you really want to; the internet is full of information on how and where you can hire a property auctioneer privately in different parts of Australia. All you need to do is get onto Google and do a search for auctioneers in your local area. Below, we have provided you with auctioneers in all of the major cities within Australia.
- Auctioneers in Melbourne
- Auctioneers in Sydney
- Auctioneers in Brisbane
- Auctioneers in Adelaide
- Auctioneers in Perth
- Auctioneers in Hobart
- Auctioneers in Canberra
When the day arrives, potential buyers will want to inspect the property first so make time for this depending on how many people have expressed an interest and be sure to have all of the relevant paperwork ready such as your section 32’s etc for your interested bidders to read through and inspect. If you have not organised this paper work, here is a guide to all of the relevant paperwork you need and the processes you need to follow, you can also find affordable conveyancers in Google who can help you with this paperwork.
- Conveyancers in Melbourne
- Conveyancers in Sydney
- Conveyancers in Brisbane
- Conveyancers in Adelaide
- Conveyancers in Perth
- Conveyancers in Hobart
- Conveyancers in Canberra
ADVANTAGES OF SELLING BY AUCTION
There are many benefits of choosing this method to sell your property:
- The bidders on the day have no knowledge of your expectations in terms of price. This means that there is a good chance that they will pay more than you expect and in many cases even more than current market values.
- You get to determine the reserve price. You do this with the help of your real estate agent by looking at the current market rates, the condition of the property and the strength of the bidders you expect to come to the auction. If the auction or the bidding does not meet your reserve price, you do not need to sell on the day and you can go about private negotiations with the highest bidders to see if you can meet at a price that is suitable for both parties.
- There is a good chance thew property will sell much higher than you anticipated if you manage to find two equally desperate bidders. Getting two bidders who are equally as interested in your property brings the emotional factor into play and could possibly start a bidding war, which can only work in your favour.
DISADVANTAGES OF SELLING BY AUCTION
If you decide to sell by auction, you should be aware of the following cons:
- There is a chance that you will not sell the property.
- A low bid at the beginning of the auction could change the expectations of the bidders and you will end up with a bunch of low bids.
- You may alienate potential buyers who don’t like the competitive nature of auctions.
- Because of the intense nature of marketing before the auction, you may end up spending a lot of money (a lot more than what you would if you were to conduct a private sale)
- You are never sure that the top bidder offered you the best price they would have. There is a chance that they could have offered more.
Now you know the strategies to sell your home and you have a good understanding of selling by auction. Now that you understand the pros and cons of auctions, find out why selling privately makes sense and why tender based sales make sense too, consider your options and make an informed decision on how to sell your own property.