Real estate expert James Pratt shares on why vendors need to be active in house auction campaigns.
Vendors at Auction Houses
Every vendor has their own unique experience selling their property by way of auction. However, it’s important for vendors to have the right mindset and be well educated in the process from start to finish. Otherwise, the disconnect will hamper expectations and the sale price even further. You may have an agent who’s not very competent at auctions and cost you thousands.
Just because an agent is success in your at selling homes, doesn’t mean they are expert at selling by auction. From the early stage of signing up an agent to sell your home, a vendor should ask the question to the agent, what is an house auction? Can you please explain it to me? An house auction is basically a process where prospective homebuyers get a chance to bid on foreclosed properties.
Fake reality property shows and highlights of houses selling at auction on TV mainly portray the auction is all about the auction day. A good listing agent should be able to explain clearly and precisely the 3 stages to sell a home at auction. It’s not just all about the auction day.
What are the 3 stages of Auction
- Pre-Auction – this is the point at which the property is listed and marketed leading up until auction day. In many suburbs across Australia, selling prior to the auction day nets a better sale price. As the buyer will have to pay a premium in order to secure the home and avoid it going to auction. The urgency of a cut-off date also motivates a buyer more than seeing it. When deciding the sales price, finding out the average price in the suburb would be helpful. For sales, nationally an auction campaign takes generally 3-4 weeks of marketing and open houses before the auction day. Check out my article on Winning Strategies For Pre-Auction Offers.
- Auction Day, this is the auction itself, onsite or in room. This is a very accurate demonstration to what the market and buyers are prepared to pay for your home a that time. If there is more than one registered party, the auction provides a way for uncapped bidding. If the property fails to sell under the hammer, a good agent will negotiate after the auction whilst the buyers are still there. To gain an edge, have a game plan with research about the local area ready. For more tips about winning in an auction, check out here.
- Post Auction – Statistically, most auctions in capital cities will sell 2 weeks after the auction. The process provides a filter of who’s a real buyer and who’s just looking for a bargain. The real market value is shown. By understanding the three key stage of selling a home at auction, a vendor will have better clarity to make key decisions such as accepting an offer. Taking an active role in the process for the vendor can also include asking questions to the agent. What’s the clearance rate for auctions in my suburb (not just in the city) each week? How many registrations is normal for auctions this month in my area?
Another valuable way to be involved is speaking to the auctioneer prior to auction day. Ask his or her opinion on what they are seeing out in the field each week. Keep track of the latest property insights by following relevant topics using the Soho App. By being active, the seller has peace of mind that they have achieved the best price and not simply run a standard auction to sell.