Selling at Auction

It's worth discussing with your agent whether auction is suited to your property.

There are many advantages to selling your property by auction:

• Auction is a three pronged marketing push. You may be able to sell your property before auction, on the day of auction, or in the event the property is passed in, directly after auction
• You are able to set the reserve price, settlement date and any other terms, to suit you
• The auction process creates a sense of urgency, buyers have a definite timeframe in which they must act. Buyers see other purchasers rather than you, as competition. Auction creates a competitive environment
• With sale by auction, all contracts are unconditional and no cooling off period applies

The first step in selecting the right auctioneer is to choose someone with a proven track record and knowledge of the particular area. In most cases, you will have already entered into a Sales Agency Agreement with an agent who will act on your behalf in marketing the property prior to auction. The agent, if qualified as an auctioneer, can conduct the auction for you. Alternatively, they can recommend an auctioneer to you or you can choose your own. All auctioneers must be registered under the Land Agents Act.

You have the right to set the reserve price, so you can be assured that the property can't be sold at less than this price. Consult with your auctioneer when setting your reserve price as they will be familiar with recent sales of similar property in the area. Remember to be realistic when setting the reserve price, bearing in mind supply and demand in the area as well as other general market considerations.

Sale before the Auction

It is not uncommon for interested buyers to make offers on properties prior to auction day. In such a case the agent will discuss the offer with the vendor, and a decision is made to either consider the offer, or continue with the auction as planned.

In the event the vendor wishes to sell their property prior to auction, the agent will generally, on the vendor's instructions, invite all potential buyers to also make an offer. The most appropriate offer is then accepted by the vendor, and contracts are signed prior to the auction date.

What will happen at Auction?

There are several possible outcomes at the auction:

• If the highest bidder reaches or exceeds the reserve price the property is sold and the auctioneer will conclude a binding contract between the purchaser and and vendor
• If the highest bid has not reached the reserve price the auctioneer will usually ask for the vendor's instructions before passing the property in
• By announcing that the propery is 'on the market' (often declared when the reserve price has been met) often encourages further bidding
• If the highest bid does not reach the reserve price and the property is passed in, the auctioneer will discuss whether you would like to negotiate with the highest bidder