Selling Your Property At Auction
Freeman Estates began life in 1911 as agricultural machinery auctioneers. This quickly spread into real estate and general property auctions too. We also ran very popular monthly Mart Auctions in Kingaroy right up until February 2005. So it's safe to say that we have a lot of experience in the auction field.
While we no longer run the Monthly Mart auctions, we certainly do run real estate auctions for clients who want to sell their property this way (click here to see any property auctions we're currently running). This part of our site exists to provide you with information about the ins and outs of the auction process; the main differences between auction sales and private treaty sales (ie the fixed price properties shown in most of our property listings); and to give you tips about how to successfully auction your property.
When Should You Consider An Auction
Auctions are likely to be a more effective way to sell your property if the property is superior in quality to others in the area ; if it's so rare or unusual that it's difficult to value accurately; or if the property market is buoyant (ie going through a boom period when prices are rapidly escalating). Submitting your property for auction means that prospective buyers will bid against one another at a date and time set by you.
Auctions are generally performed on the site of the property that's for sale. The main advantages of auctions are that sales are usually completed quickly and a firm price doesn't need to be set. You certainly need to set a reserve price (ie the minimum you're willing to accept) but not any ceiling. This open-ended situation provides an opportunity for the ultimate sale price to exceed expectations.
Against this, it must also be said that auctions are generally a little more expensive to conduct than private treaty sales because they're individually marketed (explained further below). And many real estate purchasers prefer private treaty sales simply because the price of a property is clearly defined.
The choice about whether to sell by auction or not is entirely up to you. But Freeman Estates will be happy to advise you if you're uncertain. It's in our interests to help you sell your property as quickly as possible. So we can provide you with expert advice about whether an auction or a private treaty is the best path to follow to sell your particular property.
The Steps To Auctioning A Property
If you've decided to auction your property the first step is to appoint an agent. The agent will either carry out the auction personally (which Freeman Estates certainly do!) or obtain an auctioneer to conduct the proceedings.
Questions you should ask any prospective agent include:
- How long have you been a real-estate agent?
- How familiar are you with the area where the property is located?
- How many homes have you sold in the area over the past 12 months?
- How did you arrive at the price you suggest we could sell our property for?
- What marketing plan would you envisage using for the property?
- Will you provide weekly sales progress reports?
- Do you place importance on high ethical standards?
The law requires that a written contract has to be signed between the seller and the auctioneer. This Agency Auction Agreement sets the reserve price for your property, how much commission you'll pay, and usually gives the agent exclusive rights to sell your property for a period after the auction in the event that post auction negotiations or advertising are necessary.
The agent will be responsible for planning and arranging the marketing of property including advertising. The extent of the marketing campaign will depend on the amount you're prepared to spend. The agent will clearly explain to you where and how your money will be spent. The agent will also be responsible for arranging all inspections that are performed prior to the auction. All of this work should help to ensure that several genuine bidders attend the auction on the day.
It's also important that the contract for the property should be available well in advance of your marketing campaign. So advise your solicitor of your intention to sell your property at auction and have the contract ready to go.
Some Tips for a Successful Auction
Freeman Estates have conducted literally thousands of auctions since 1911. So we know what tends to work well and what doesn't. Here are our tips for ensuring your own auction is as successful as possible:
- Work out the appropriate advertising budget to ensure your property is widely advertised. This isn't an area to skimp on.
- Make sure the property is well presented because a potential buyer's first impressions are crucial to a successful sale (we can give you tips on how to spruce up your property for best effect).
- Ensure your sale contract is prepared well in advance.
- Allow the auctioneer to arrange as many inspections with prospective buyers as possible.
- Don't disclose or discuss your reserve price with anyone except your agent.
- Advertising material shouldn't refer to the reserve price either.