The key reason for somebody to engage in an auction lives largely within 3 key areas. The first of which is no price. No price means that the eventual price that you can receive is based solely on the market’s value. The alternative to that of course is that you put your own price on it. The risk you run is if that price is too high is that people will not engage with your property. If that price is too low you run the risk of underselling it. No price allows the market to engage which leads me to my second point.
You create an end date for which interest can participate, and an end date of competition from opposing buyers. This means that the buyers who are showing interest in the property need to make a decision. Which gives you an appropriate amount of time for your property to sit on and test the market and an environment where by, not only do the buyers get to see their competition, they get the opportunity for a right of reply. When an auction is performed effectively, it creates a competitive environment which leads to higher sales prices.
Finally, when you go to auction you engage with an auctioneer. An auctioneer is a professional, third party negotiator that you’re able to utilise to guarantee that you receive the highest price on your sale. Not only have you engaged with an agent, who would normally be the sole negotiator, you’re able to engage with an auctioneer, a professional negotiator who will assist in the sale.
Those 3 factors are largely why we recommend that any property can and should go to auction, as long as they go to auction with an auction agent that has done the many years of training that’s required to run an auction campaign.
There is no specific time to auction other than the time that it takes to effectively cover the market. Whether that be a time based on day or night, season, length of time on market, our answer is always the time that suits the property the best. If it’s a market that there are less buyers in, then you probably need a longer auction campaign. If it’s a buoyant market then maybe you’d consider a shorter market campaign. In booming markets we have done auctions in as quick as 2 or 3 days and in sluggish markets we’ve run them over 8-10 weeks. The length of time always depends on what the market is doing.
In order to maximise the price of any property you do want to present it in it’s absolute best light. That sometimes means staging, sometimes painting, other times it’s landscaping, but ultimately what you want to achieve is competition. I have said to many owners over the years if the choice comes down to presenting it and having no money left for marketing, or spending less on presenting and having more for marketing, there’s no point in having a beautifully presented property if nobody comes through the front door. So you need to invest just as heavily in the marketing to ensure you get the people there first, then when they turn up it’s got to be presented to the right level.
When it comes to inrooms vs onsite, I liken them to a church and a garden wedding. On a beautiful day when the sun’s out and the birds a chirping a garden wedding is one of the most scenic and beautiful weddings you’ll ever attend. However, if it’s raining or someone has set up a loud party next door, for no fault of anyone’s, it can influence the entire feeling of the wedding. If a wedding is inside a church, regardless of what’s going on outside, it’s in a controlled environment and the feeling or outcome is the same.
We also love inroom auctions because they take away two of the big stresses that an owner can go through on auction day. That’s presenting and preparing their home for people to come through it and the public display of the auction with all their friends, family and neighbours watching. I’ve auctioned my own properties using both onsite and inroom auctions over the years, both have merits but the safer of the two is certainly the controlled environment of an inroom auction.
To choose a good auctioneer I would recommend going and attending a number of their auctions. Make sure that they have the ability to warm to a crowd quickly, can present the property appropriately and finally, can auction or negotiate to the high standard that every owner expects for their home.
Finally, a reserve price needs to be set at a level at which you are happy and willing to sell the property because a reserve gives the auctioneer the power to do so. It also needs to be engaging enough that buyers are going to reach it. Once buyers do reach that price you can then stimulate competition by telling them that they are above the reserve price using the term “we are on the market”.
