When the time comes to sell your property, most vendors hope to achieve the very best price. While some sellers might be looking for a quick sale for many reasons, if you want to maximize the sale price, the most effective way to do it is often by taking your property to auction. Ultimately, the best way to achieve a high price when you sell your property is by having multiple buyers interested simultaneously. The auction process not only creates this situation but also enhances it. The role of the sales agent is to market a property and bring competing offers together, to play them off one another to ramp up the price. This is precisely what the auction does in a more formal process. If you have multiple bidders interested, the end sales price can overshoot what might be considered the property’s market value.
Adding Emotion
The auction process brings all buyers together at one time to bid against each other. What this does is create genuine competition, which ultimately adds emotional intensity. Emotions can still be involved when making offers by private treaty, but it’s not at the same level as an auction. Auction day can often attract large crowds of spectators, enhancing the emotional element by increasing competitiveness among bidders. When emotion and competition are involved, it can get people to bid for more than they might have under different circumstances, boosting the vendor’s end sales price.
Unconditional Sale
In most auctions, the terms of the sale are already predefined by the vendor. When you win the auction, for the most part, you are buying that property unconditionally. That means there’s no cooling-off period, no subject to finance – the sale is final. While it’s important to understand that the good must have reasonable terms attached to it, as most buyers will still need approval for a home loan, the vendor is very much in control of the words.
Faster Sale
Generally speaking, the auction process involves a four-week marketing campaign followed by an auction. From there, the settlement would normally be around 30 days later. This means that the auction process generally results in a faster sale (or lower days on the market). Having an end date also adds to the urgency and ensures serious buyers are ready to go when the time comes. When selling by private treaty, you can often run into periods of prolonged negotiation, which can stretch out the process and, therefore, the settlement time.
You Can Still Sell Before the Auction
It’s important to note that while a property might be getting sold by auction, it can still be sold prior. If you ask most agents selling a property whether or not they are accepting offers before the auction, most will likely say they are not. The reality is that many agents may say this, but if a strong enough offer is presented, they must vendor. That means you can still get a quick sale at a good price, even if the property is planning a ton.
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