The dream auction process: A fast-talking auctioneer stands in front of a property and accepts bids from eager would-be buyers, before the gavel drops and it is sold amid a flurry of waving paddles and pointed fingers.
It’s important and in the best interest for the sellers to understand the process of the popular sale method, from marketing to reserve prices and everything in-between.
Before auction day
A well-thought-out strategy is key to a successful auction, and much planning goes into the said strategy. The agent will run a marketing campaign, usually four to five weeks before the auction date. This consists of advertising the property, open homes, liaising with potential buyers and providing.
Then, the day before the auction, the agent and vendors talk numbers. The feedback received during the campaign will be an important part of this meeting. The reserve price – the figure at which the auction becomes “on the market” – is also be agreed, as well as any potential vendor bids; a device used to encourage bidding.
An auction can either be held onsite at the property or in another location, like a boardroom.
The agent will run through the process for the auction day too.
On auction day
There are rules about how auctions run and rules differ from state to state. Usually, the home will have its final Open For Inspection immediately before the auction.
At least 30 minutes before the auction commences, the agent is required to display certain documentation about the property and verbally provide set information to potential buyers.
The auctioneer will undertake legal disclosure of information. In most states, potential buyers must register before the auction starts to get a bidder’s number.
Bidding
It’s now time for the action to begin. The auctioneer will invite an opening bid to start the auction and then accept subsequent bids. The auctioneer can “set the tone for increments”, but bidders can seek other amounts. A vendor’s bid can be used to encourage bidding from buyers. Reaching reserve and going ‘on the market’
Once the reserve price has been reached, the property is considered to be “on the market” and is sold to the highest bidder.
Passed In
If the property doesn’t reach the set reserve price, the property is passed in. The highest bidder is usually given a chance to negotiate with the seller, but this is not the law.
Your agent and auctioneer is there to support you every step of the way, and know that you are in safe hands and working to get you the best result.
Chat with one of our friendly agents today if you wish to learn more about the process, or how they can help you with your next property journey!