According to The Property Shop’s Hugh Bateman, private sales have traditionally been the marketing method of choice in the area but this is rapidly changing.
“With a private sale, or fixed treaty, the price is set. Although it can increase with competition, in most cases the asking price is the benchmark,” Hugh said.
“Auctions on the other hand see the buyers determining the price, with results that are pleasing to the vendor. This has been the case in recent weeks with both rural and residential auctions.”
Hugh said that apart from the opportunity to realise an unexpected price bonus, auctions appealed because buyers have to commit on the day and there is no cooling off period as there is in a
“Auctions also significantly raise the profile of the property through a carefully targeted, intensive marketing programme. It places a time limit but also still enables the vendor to sell beforehand if the opportunity arises,” Hugh said.
In summary the auction advantages are:
• Auction is a three pronged marketing push. You are able to sell your property before auction, on the day of auction, or in the event the property is passed in, directly after auction.
• You are able to set the reserve price and a settlement date to suit you.
• Because you have not declared your reserve price it gives you a chance to test the market.
• A written marketing plan with set appointment times enables you to manage your life during the marketing.
• The auction process creates a sense of urgency, buyers have a definite time-frame in which they must act. Buyers see other purchasers rather than you, as competition. Auction creates a competitive environment.
• With sale by auction all contracts are unconditional and no cooling-off period applies.
You have the right to set the reserve price, below which the auctioneer is not permitted to sell. Consult with your auctioneer when setting your reserve price as he/she will be familiar with recent sales of similar property in the area. Remember to be realistic when setting the reserve price, bearing in mind supply and demand in the area as well as other general market considerations.
Sale before the Auction
It is not uncommon for interested buyers to make offers on properties prior to auction day. In such a case the agent will discuss the offer with the seller, and a decision is made to either consider the offer, or continue with the auction as planned.
In the event the seller wishes to sell their property prior to auction, the agent will generally, on the vendor’s instructions, invite all potential buyers to also make an offer. The most appropriate offer is then accepted by the seller, and contracts are signed prior to the auction date.