Selling by auction is a method most buyers in Western Australia overlook when putting their property up for sale. But if you’re weighing up different selling strategies, it’s an option worth considering.
Property auctions are less common in WA than other states with only around two per cent of properties sold under the hammer.
By contrast, the average number nationally is approximately one out of every five, with around 23% of properties auctioned in Sydney, 30% in Melbourne, 11% in Brisbane, 27% in Adelaide, 16% in Darwin and 10% in Canberra (source: REIWA.com)
What Are The Benefits Of Property Auction?
A property auction with its short but high profile marketing campaign can be very effective in bringing out the more serious buyers.
When there are many properties listed for sale and hesitant buyers are spoiled with choice, an auction could be just the thing you need to give your property an edge.
The biggest reasons to sell by auction are:
Property Auction generates a sense of urgency – An auction by nature creates urgency as there is a definitive time in which the buyer must act or they risk losing their opportunity to buy the property. Setting an auction date, groups all interested buyers together at the one time, creating a competitive environment and the greatest chance to achieve the highest possible price. The theory of an auction is that your home will sell at true market value at that particular time.
Planning ahead – Unless the property is passed in and consequently becomes listed ‘for sale’, the seller knows exactly when a sale and settlement will occur.
Competition between buyers lead to above average selling prices.
Auctions provide sellers with the opportunity to set specific terms of sale.
Seller’s who choose to sell by auction have reserve price protection – During the marketing campaign, buyers are usually given a price guide which can vary throughout the campaign depending on the amount of interest in your property and feedback received from buyers. The great thing about auctioning your home is that there is no price limit only a minimum amount that you decide you are prepared to sell for, which is called the reserve price.
TIP: Setting the reserve should be an analytical decision based on buyer feedback obtained by your agent during the campaign as well as comparable sales in your area. By now you should have a good idea as to how many buyers are genuinely interested and how they feel about your home in relation to the price that has been quoted to them.
What Do I Need To Know About Property Auction?
The marketing undertaken for an auction property needs to be more focused and will most likely cost a little more than a normal marketing program as the auctioneer will charge an auction fee of around $770 to the agency which is passed onto the seller.
Buyers need to conduct building inspections and ensure their finance is approved prior to bidding at the auction. If the property fails to sell at auction, you can continue marketing the property with an asking price. It is likely that one of the buyers, often the highest bidder will come forward and negotiate a sale with the agent on your behalf.
Should the property sell on auction day under the hammer, the property is sold and there is no cooling off period for the buyer or the seller.
To find out more about property auction and whether it’s right for you, contact One Agency South on 08 6311 3333 or email us at email@example.com. You are also welcomed to attend one of our property auctions (open to the public) – check out our RESIDENTIAL PROPERTIES FOR SALE page to find out when’s our next auction!