What is the reserve price and how is this set?
The reserve is the minimum figure that the auctioneer is authorised to sell the property. This figure is generally established as a result of feedback from your agents open homes and interested parties during the marketing period. Generally this is set with the auctioneer by the client just prior to the auction beginning. Your agent need NOT be aware of your reserve price, the auctioneer will request the reserve to be in writing.
How do buyers bid at the auction?
The auctioneer will ask for an opening bid and will then nominate the increments by which the bidding can be raised. Interested parties simply attract the attention of the auctioneer by raising their hand and calling out their bids or nodding when they catch the auctioneer's eye.
The successful bidder will be asked to pay the 10% deposit and sign the auction agreement immediately following the close of the auction.
Where is the auction held?
The auction can be held at the real estate agents office, in auction rooms (depending on the real estate company used) or, my personal favourite is on-site at the property due to be sold; from experience this method creates the best result.
Can I sell prior to auction?
Yes, you can. This is called a pre-auction Offer. A customer may submit an offer on the Auction Particulars and Conditions of Sale Agreement. If this offer is acceptable to you, all other registered customers are given the opportunity to submit their offers if they wish to. You can then decide which offer suits you best.
Can someone bid when they need to get finance?
Because interested parties must be in a position to bid on a cash unconditional basis at the auction, they are advised to organise through their bank or mortgage broker pre-approval to bid up to a price they are prepared to pay.
Can someone bid when they have a property to sell?
There are two options:
If they are in a sound financial position they may arrange bridging finance to cover any delay in settling their property. OR; they may request a longer settlement date, giving them time to sell and to settle their property.
What if my property fails to sell at Auction?
If the reserve price is not reached, the property is passed in to the highest bidder. The highest bidder is then offered the first right to purchase the property immediately after the auction at the client's reserve price. If a sale is not completed immediately following the auction, the property will be offered for sale to all other interested parties, should there be no other interested parties, the property can begin a fresh marketing campaign via another method of sale, in most cases a fixed price is then advertised.
What are the benefits of an Auction?
• Attracts highly motivated and competitive buyers
• Provides an opportunity for you to receive a maximum sale price as it does not set a cap price
• Eliminate perceived negatives and objections to an asking price
• Established sale date creates urgency
• Allows you to sell prior to auction
• A sale on the day is a cash sale that is unconditional, therefore allows you to control the terms of the sale