How to sell for more at AUCTION
Imagine this: Auction day is here. You feel excited, in control, you know exactly what will happen and have a plan for every possible scenario. You have experts you trust and know exactly where you need to be, what you need to do and can sit back and watch the show unfold.
If only everyone felt like this on the day their home went up for public auction.
Unfortunately, it can be one of the most stressful, confusing and overwhelming experiences to go through- but with a clear auction process it does not have to be so hard.
Price is the driving factor of selling a home and it can feel like an enormous decision when YOU need to put a price on your own home that you will accept.
BUT if you know how, you can use your reserve price as a tool to get the best result.
Your RESERVE price is the amount that triggers the property on the market. There is something I would like you to understand. When selling at auction, if you were to set your reserve at $1.00 you will still end up at the same level of bids. Buyers do not know what your reserve is, so it means nothing to them. They have already made up their minds as to what they will bid up to. It is because of this that you can use your reserve as a tool to increase competition at the pointy end of the bids.
You need to work with and trust your agent or auctioneer to have a strategy for each scenario that could occur.
Once you have a clear understanding of how the campaign has gone and what the buyer feedback is leading up to auction day you can then work on developing your strategy for each scenario that could unfold. This will help you know exactly what could happen on the day and what you will do.
There are 4 things that can happen on auction day.
1. No decision is needed - You have competitive bidding that passes the reserve, the property is sold under the hammer for an amazing price.
2. No decision is needed - No one bids, and the property is passed in on a Vendor Bid
The property is converted to a private sale with an asking price (your reserve price). The agent will begin negotiating with buyers that have been through and any new buyers that come forward.
The next two scenarios are where you need to know what to do and what decisions to make if they occur. Pass the property in and negotiate with the highest bidder or declare the property on the market to encourage new bidding and momentum
3. You have bidding which starts to slow down and stops just below or just on the set reserve price with only 1 bidder left in the mix.
Your agent could either come in to discuss with you or know the strategy you have discussed for this situation and pass the property into this bidder who has exclusive rights to negotiate with you.
At this point your reserve price can be changed to encourage a result closer to your dream price and allow negotiations to take place and allow you to decide on whether you will sell to this buyer.
4. You have competitive bidding with 2 or more bidders that starts to slow down at, or just above the reserve price. Your agent knows there is more in the crowd and those magic words “we are on the market” will encourage a new surge and momentum of bidding from the buyers in the crowd knowing that whoever holds the last bid will be the new owner.
Did you know the auctioneer does not have to declare the property on the market when the figure is reached? It is up to the skills of your auctioneer to know how to read the crowd and act on your instructions.
In this type of situation, it is crucial that you trust the experts you have working for you to handle this situation.
As a Seller’s Advocate I enjoy how the auction process can achieve the best result when done right and making sure my clients feel confident in the process. I always make sure they know exactly what to expect on the day and what decisions they will need to make.
Let me know if you need advice or help to find an agent you can trust.