Selling your home at auction has become increasingly popular in Australia. The old belief that auctions are for sellers in desperate need of a sale has long since passed and is now seen as an effective way to sell with the buying community sure you are committed to making an immediate sale.
With this trend on the rise, here are six top tips on how to successfully sell and buy your property at auction.
Tips for selling at auction
1. Choose an experienced agent
A good real estate agent understands the market in your local area and will have the experience in running successful marketing campaigns for properties like yours. They will also know how to maximise your property’s exposure to potential buyers and help you set a realistic reserve price.
2. Develop your advertising strategy
Your advertising strategy should expose your property to as many prospective buyers as possible. To do this, your real estate agent will usually embark on a comprehensive marketing campaign for your home including signboards, internet, direct mail and local advertising. They will also have a comprehensive buyer database that will help them match up your property to potential buyers.
3. Make sure your property is well presented
A potential buyer’s first impression of your property will play a key role in not only grabbing their interest but also getting the right price. Make sure the property looks fresh and well maintained both inside and out before launching your marketing campaign.
4. Get your agent to organise as many open homes as possible
This will serve to create interest and have a significant effect on the turnout at auction.
5. Do not disclose your reserve price to anyone except your agent/auctioneer
One of the plus sides of the auction process is that potential buyers drive up competition and give the seller the best price. It is counter productive if buyers already know your reserve price because if it is too high it might attract less bids.
6. Get your documentation ready
Prepare all contracts and other documentation before commencing your marketing campaign. Your agent will be able to provide you with a checklist of what is required
Tips for buying at auction
1. Find out what the property is worth and how much you can afford to pay.
Talk to your agent about recent sales in the neighbourhood and attend open homes to get an idea of property values in the area. Get a builder or architect to inspect the property thoroughly so as to have an idea of any issues that may impact on the property’s value. You could also use this as a bargaining chip to negotiate on price. Check out the amenities in the area, schools, public transport and leisure facilities can all add to a property’s value.
Watch out for any nuisance factors such as busy roads or motorways which are noisy or pose safety issues, loud bars and clubs and plans to construct structures which may diminish the property’s reselling value.
2. Familiarise yourself with the auction process
Attend lots of auctions to get an understanding of how the auction process works so that you are confident at the auction. You should particularly observe auctioneers, sellers and buyers so that you have an idea of what to expect on the day.
3. Arrange your finance before the auction
Get your mortgage broker to arrange formal home loan pre approval, so that you are able to proceed with sale if you get the winning bid.
4. Have your contract of sale checked thoroughly before the auction
Get your solicitor or conveyancer to thoroughly check the contract of sale and make sure you understand your legal obligations.
5. Get some help on auction day
If you are not comfortable with the thought of bidding at auction, get a friend or a professional to bid on your behalf. The plus side with this strategy is that a professional third party is less likely to get emotional at the auction and engage in a bidding war.
6. Don’t be afraid to put an offer in before auction
If you don’t want to bid at auction and you really want the property, you may be able to negotiate with the vendor and put in a pre-auction offer.