When the time comes to sell your property, most vendors hope to achieve the very best price.
While some sellers might be looking for a quick sale for many reasons, if you want to maximize the sale price, the most effective way to do it is often by taking your property to auction.
Ultimately, the best way to achieve a high price when you sell your property is by having multiple buyers interested at the same time. The auction process not only creates this situation it also enhances it.
The role of the sales agent is to market a property and bring competing offers together, to play them off one another to ramp up the price.
This is precisely what the auction does in a more formal process. If you have multiple bidders interested, the end sales price can overshoot what might be considered the property’s market value.
The auction process brings all buyers together at one time to bid against each other. What this does is create genuine competition, which ultimately adds emotional intensity.
When making offers by private treaty, there can still be a level of emotion involved, but it’s not the same level as an auction. Auction day can often attract large crowds of spectators, and this also enhances the emotional element by increasing competitiveness in bidders.
When emotion and competition are involved, it can get people to bid for more than they might have under different circumstances, again boosting the end sales price for the vendor.
In most auctions, the terms of the sale are already predefined by the vendor. When you win the auction, for the most part, you are buying that property unconditionally. That means there’s no cooling-off period, no subject to finance – the sale is final.
While it’s important to understand that the property will need to have reasonable terms attached to it as most buyers will still need to obtain approval for a home loan, the vendor is very much in control of the times.
Generally speaking, the auction process involves a four-week marketing campaign, followed by an auction. From there, the settlement would typically be around 30 days later. This means that the auction process generally results in a faster sale (or lower days on the market). Having an end date also adds to the urgency and makes sure serious buyers are ready to go when the time comes. When selling by private treaty, you can often run into periods of prolonged negotiation, which can stretch out the process and, therefore, the settlement time.
You Can Still Sell Before the Auction
It’s important to note that while a property might be sold by auction, it can still be sold prior. If you ask most agents selling a property whether or not they are accepting offers before the auction, most will likely say they are not. The reality is that many agents may say this, but if a firm enough offer is presented, then they are required to take it to the vendor. That means you can still get a quick sale at a reasonable price, even if the property is planning to go to auction.