These days, selling your house by auction is becoming increasingly popular in WA after years of success throughout the eastern states.
Many believe that auctions are the best way to secure a high price for a property, given the competitive nature of buyers and the high pressure environment of an auction. David Lynch, a qualified auctioneer and licensee at Peard Real Estate Group’s Leederville office, has seen a big increase in the number of auctions for his properties in recent months.
Selling by auction: The pros
There is no sale price limit when it comes to auctions. Your property is worth what buyers are prepared to pay for it on the day. This is often well received by the seller, unsurprisingly.
The seller sets the terms and conditions of the sale for an auction so they are always in control.
Protection for the seller
The seller is protected by the reserve price. This means that your property will not sell unless bidding reaches a pre-agreed level. This figure is determined carefully between the seller and agent and the property will not be sold for less.
Sense of urgency
Auctions generate a sense of urgency among buyers. Typically, a set ‘end date’ for the sale of the property will be made and this encourages any potential buyers to make a decision on the day. Genuine buyers will also have typically viewed the house within the first two weeks of marketing. As auctions have a strict timeline, interested buyers are forced to take prompt action.
Exposure through marketing
The property is usually held exclusively by one real estate agent for a fixed period of time during which marketing of the property is intense and very effective in attracting interest.
Three chances to sell your property
Before the auction - buyers have the opportunity to approach the real estate agent prior to auction day with an expression of interest.
On auction day - if the reserve price is reached.
After auction - if the reserve price is not met, the real estate agent will contact the highest bidder for further negotiations.
Selling by auction: the cons
There may be additional costs involved to sell a property via auction. Usually this is used to cover the cost of hiring a specialist auctioneer. It is important to discuss and compare the costs to sell via auction with your agent.
In some cases, an auction isn’t the right way to sell a particular property. For example, for a large block of identical units which are all of a similar specification, everyone would be aware of the sale price of other units, thus a private sale could result in a higher sale price per property. To discuss find out whether auctions is right for your property - consult your agent.
Special conditions of sale
Generally, auctions are not suited to buyers who wish to purchase subject to finance as often bids are unconditional. Alternatively, some potential buyers could be anxious at the thought of bidding for a property at auction. Both situations limit the potential number of buyers that your property could appeal to.
David Lynch’s investor database now exceeds 1,000 clients of which he has regular contact with. He also has a large overseas client base, focusing in on clients from the east coast of Australia, Singapore and Asia, Dubai, London and South Africa, who are always looking to invest in Perth property.
David is a licensed auctioneer, and is a proud member of the REIWA Auctioneers’ Committee. He is always keen to show his auction wares and he excels in providing these services not only for property auctions but also charity auctions. To see him in action, keep an eye out for any up and coming auctions at Peard Leederville. Call David on 0409 955 554 to discuss whether your property is right for an auction sale.