Auctions can be a fantastic way to sell. The fact that once the hammer goes down, the contracts are unconditional is a big plus. No cooling-off period, no finance issues. It's all over, red rover. But you shouldn't be blindly led by an agent that only auctions.
Auctions can be a great way to sell. We firmly believe they allow you the opportunity to get a dream price. Imagine sitting inside your home on your chosen Saturday. Outside a dozen super keen buyers are waiting to buy their own piece of paradise (i.e. your home). The auctioneer starts, and the bidding is frantic. It hits your reserve price. A few people drop out, but it becomes a bidding war. The price goes up quickly, moving back and further between 3 buyers. After an exhilarating 23 minutes the hammer comes down and your property has sold $100,000 over your best-case scenario. Pretty exciting stuff right?
This does indeed happen. It's not just on The Block. But, you'd be mistaken to think this is a guarantee. Or something that is even a regular occupancy.
Just as likely scenario is that the auction is a week away. Your agent is a bit nervous. He had five keen buyers on Monday however two have since bought elsewhere. One has stopped returning his calls. Now, the auction is just about to start, and only one person has turned up. All the neighbours are there looking to see how well your place does.
The auction starts, the one solitary bidder gives an opening bid $100,000 less than your goal. Then nothing. Crickets. The buyer quickly realises he is the only one bidding. He now thinks no one else likes it. Maybe he can get it for a steal. Or perhaps he is making a terrible decision. The agent tries to get the buyer to increase his price. But why would he? The agent then comes and sees you inside. You have a terrible feeling in your gut. The agent tells you that you need to drop your price by $80,000 to secure the sale. You don't want to, but maybe that's the best you are going to get. You feel under tremendous pressure and start to regret your decision to auction.
We have seen many people lose a lot of money when our competitors have auctioned the wrong house in the wrong spot.
Running an auction campaign takes serious skill. The second example above is unlikely to happen if the agent is doing their job correctly. There are ways to mitigate these risks, such as negotiating prior to the auction when numbers are low. A successful auction campaign is created after hundreds of conversations with would-be buyers. It's a subtle art form which is easy to stuff up. But when it works well, it's magic.
Our recommendation to auction is generally based around the following criteria:
Think about these questions, and see if you are still comfortable. If not, we won't pressure you. Selling by private trendy (just a normal 'for sale') can also be a great way to sell.
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