You've decided to sell, which is great! But you're not sure whether to choose auction or a private sale. Here's our complete guide to selling your house via auction.
There’s been so much data publicly available about what’s happening in the property market. Buyers have the internet at their fingertips and can research and establish the likely maximum price they should pay for your property at any time. Having said that, the best way to convince potential purchasers to raise their limit is for them to realise that someone else is prepared to pay even more for your property.
We know auctions can be a real game-changer, often fetching a great price for your property. Auctions for houses create a lively setting where buyers bid against each other, sometimes pushing the sale price beyond expectations. We're here to help you every step of the way, from understanding the auction real estate process to setting that all-important reserve price.
Contracts and criteria may differ depending on your state, speak to your local Ray White agent to get fully informed with local market data and the correct information for you.
Creating competition is vital to securing the best price
At Ray White, our entire family history has been based on creating competitive situations for our vendors. Auctions have proudly been part of the fabric of this fourth generation, family-owned and led business since 1902. This method of sale is one we believe in and have recommended to our clients since then.
We still believe it’s the purest form of selling real estate.
Auction is a method of sale where the market determines the price of an asset in an open forum negotiation.
Understanding the auction process
Selling your house via auction offers a unique opportunity to potentially hit a premium price. It kicks off with prepping your property to auction, covering marketing, inspections, and setting a reserve price. On the big day, buyers gather, and the highest bidder at or above your reserve price takes home the win. This competitive atmosphere can really boost the sale price compared to a private sale.
When considering auction vs private sale, remember auctions bring urgency and competition. Buyers have to act fast, often sparking bidding wars. Private sales might offer more time to negotiate but can leave you guessing on the final price and timeline.
The auction process is structured yet flexible. It starts with a chat with a seasoned agent who will guide you through prepping your home for auctioning. A marketing campaign can follow to draw in buyers, and the auction itself usually happens a few weeks later, giving time for inspections. When the hammer falls and your property sells, the deal usually wraps up in a few weeks.
Setting the reserve price
Getting the reserve price right is crucial when selling your house via auction. It starts with a deep dive into market trends. Knowing the local real estate scene, recent sales, and buyer demand, agents at Ray White can help set a competitive reserve price that pulls in bidders and guarantees a fair return.
Your property's condition, standout features, and the economic climate all play into setting the reserve. It's also smart to consider buyer expectations and the interest your property to auction has generated.
Social proof
Buyers can look each other in the eye and see what someone else is prepared to pay for it, and can then decide if it’s worth more to them and continue bidding, all on an open and even playing field.
As the vendor, you have the benefit of exposing your property to the entire market and maintaining control of the process by only selling should your reserve price be met. It’s also sold on favourable terms - which means you get an unconditional contract - which gives security to the transaction that what a bidder offers is what a bidder pays.
With other methods of sale, such as private treaty, the sale can sometimes be subject to a cooling-off period. Depending on your state, during a cooling off period, buyers may have the right to withdraw from the contract if certain criteria aren't met, such as if finance isn't approved, a building inspection is unfavourable etc. This can be frustrating and disappointing for all parties involved. Selling via auction ensures that the sale is unconditional and final, meaning as the vendor you have more security.
Of course, you can still sell any time before the auction
If you receive a good offer before game day, you can weigh it up. But through competitive bidding and open negotiation on the auction floor, our data proves you will likely receive at least 10 per cent more at auction.
So no matter what state the market is in, an auction campaign, if carried out correctly, gives you the best chance of creating that competition between bidders to achieve the maximum price for your property. So what are you waiting for?
At worst, an auction campaign gives you a platform where post-auction negotiations can take place to still achieve the best possible outcome.
