What is a real estate auction?
An auction is a method of selling a property through the process of public negotiations
Sense of Urgency: The auction day deadline sets a finite selling period and creates a sense of urgency amongst buyers.
Buyer Competition: An auction can create the conditions for buyer competition - and multiple bidding can lead to a premium price.
Options: You remain free to consider any offers before Auction day,
if you choose to.
Certainty: Buyers must bid on an unconditional basis - no complicated conditions.
Control: You are in control - you set the reserve and select the possession date that suits you.
No Price Limitations: By marketing without a price you are never limited by an asking price that is too high or too low, so you can attract a wider range of buyers.
Feedback: Your salesperson will provide regular market feedback to assist you in setting the reserve price of your property.
That the Auction process is supported by an appropriate marketing programme to create a high profile and attract as many buyers as possible before the Auction day.
Open Homes scheduled throughout the marketing period will allow all potential buyers easy access.
The reserve is the minimum figure that you instruct the auctioneer to sell the property for. This figure is generally established as a result of feedback from interested parties during the marketing period and is usually set by you with the auctioneer prior to the auction.
The auctioneer will open the bidding by asking for an opening bid and will then nominate the increments by which the bidding can be raised. For example, an opening bid is placed of $200,000. The auctioneer then nominates for the bid to go up in increments of $10,000, meaning that the next person that bids will be offering $210,000.
People will make bids by attracting the attention of the auctioneer - raising their hand, calling out their bid or nodding their head when they catch the auctioneer’s eye.
Once bidding reaches your reserve price, the property is “on the market” and will sell to the highest bidder when the bidding stops.
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 your reserve price. If a sale is not completed immediately following the auction, the property will be offered for sale to all other interested parties.
In most cases you can sell your property before auction day. This is called a pre-auction offer. A buyer may submit an offer on the Auction Particulars and Conditions of Sale Agreement. If this offer is acceptable to you, all other registered buyers are also given the opportunity to submit an early offer.