Selling at Auction: Comprehensive Guide and Next Steps

Selling your property by auction is a popular and effective method in Australia, especially in competitive markets like Sydney and Melbourne. Auctions offer transparency, create urgency among buyers, and often result in faster sales and higher prices.

However, to achieve the best possible outcome, it’s crucial to understand the process, prepare thoroughly, and work closely with your agent.

Here’s a comprehensive guide to selling by auction, what to expect, and how to handle scenarios where your property doesn’t sell under the hammer.

Why Choose to Sell by Auction?

One of the main advantages of selling by auction is that it creates a sense of urgency and competition among buyers. The transparent process encourages buyers to make their best offers on the day, often resulting in a higher sale price than private treaty negotiations.

Auctions also give sellers more control over the process. By setting a reserve price and discussing terms with your agent, you can tailor the campaign to your needs. Additionally, auctions provide a definite sale date, typically at the end of a four- to six-week campaign, reducing the uncertainty often associated with selling property.

Preparing Your Property for Auction

Preparation is key to a successful auction campaign. Start by working with your agent to create a comprehensive marketing strategy that highlights your property’s best features. This includes professional photography, detailed property descriptions, and leveraging digital and print media to maximise exposure.

Decluttering, deep cleaning, and making minor repairs can enhance your property’s appeal. Staging the home with stylish furniture and decor can create a welcoming atmosphere and help potential buyers imagine living there. Flexible inspection times are also important to attract more prospective buyers and build competition before auction day.

The Role of the Auctioneer

Choosing an experienced auctioneer is crucial. A skilled auctioneer creates an atmosphere of excitement and anticipation while maintaining professionalism. They guide the bidding process, encourage competition, and ensure all legal requirements are met. Attend a few auctions beforehand to observe auctioneers in action and select one whose style aligns with your goals.

What Happens on Auction Day?

On the day of the auction, registered buyers will bid on your property in increments determined by the auctioneer. If bidding reaches the reserve price, the property is officially "on the market," and the highest bidder will purchase it at the fall of the hammer.

It’s important to note that there is no cooling-off period for auctions. Contracts are exchanged and the deposit is paid immediately. If the reserve price isn’t met, the property will "pass in," giving you the opportunity to negotiate with the highest bidder or other interested parties.

What Happens if Your Property Passes In?

Many vendors see their property passing in at auction as a setback, but it’s important to view it as part of the broader sales campaign. In some cases, properties pass in because buyers are hesitant or deliberate, especially in slower markets.

When this happens, the highest bidder gains exclusive negotiation rights with the agent. If an agreement can’t be reached, the agent can negotiate with other potential buyers. In many cases, properties that pass in are sold within days through post-auction negotiations.

Selling by Private Treaty After Auction

If your property doesn’t sell at auction or through immediate negotiations, your agent may recommend relisting it as a private treaty sale. This approach allows buyers more time to consider their options and often attracts those who weren’t in a position to bid at auction.

This phase can also give vendors the chance to reassess market expectations and adjust their strategies to achieve a sale.

Tips for Auction Success

• Trust Your Agent: Work closely with your agent and heed their advice on pricing, presentation, and marketing. They have the expertise and market insights to guide you effectively.
• Set a Realistic Reserve Price: Your reserve should reflect current market conditions to attract serious bidders.
• Listen to Feedback: Use feedback from buyers during the campaign to refine your strategy and address any concerns.
• Stay Flexible: A small degree of flexibility can make a big difference, whether it’s adjusting the reserve price or making minor updates to the property.

Conclusion

Selling by auction can be a fast, effective, and transparent way to achieve a great result for your property. By preparing thoroughly, working with experienced professionals, and staying adaptable, you can maximise your chances of success. Even if your property doesn’t sell under the hammer, post-auction strategies offer opportunities to achieve a great outcome.

With the right approach, an auction can provide the perfect platform to move on to your next property adventure with confidence.