Selling your home by auction has many advantages. It can create urgency on the part of the buyers and potentially drive up prices by appealing to their sense of competition. Auction contacts are also unconditional, so you get to set the terms and conditions. You don’t have to sell under your reserve price, but if the property doesn’t reach that figure you can always negotiate with likely buyers.
With all of that said, selling at auction can be pretty stressful stuff. Here’s how to stay calm and carry on when auction day comes around.
1. Understand what to expect on the day
The more you understand about the process, the less room you’ll leave for nerves. There should be no surprises for the seller. If you aren’t sure about anything, feel free to ask your agent and they’ll happily fill you in.
Although buyers have to register before the auction in most states, the list is confidential. You won’t be able to see it. However, your agent can give you an idea of how much interest your listing has generated and what kind of crowd to expect.
2. Appoint an auctioneer with experience
In the lead up to auction day, your agent will have been working hard to market your property and get as many interested buyers there as possible.
On the day, though, it’s all up to the auctioneer.
A good auctioneer can read body language and meet the mood of the crowd. They balance showmanship with shrewd negotiation skills. Auctioneers are bound by strict rules and must announce the terms and conditions of the auction clearly.
If you’re confident in the abilities of your auctioneer, it can take a lot of stress off your shoulders. And an auctioneer who comes with an excellent record can create a little bit of extra buzz for your property — another bonus.
Your agent will usually recommend someone, but you can also ask around for recommendations. If you’ve attended auctions in the past and been impressed by the auctioneer, consider getting their details for yours.
When you’re talking to an auctioneer, ask them what their recent sales records have been, and ask about any negotiation that went on behind the scenes. You’ll quickly get a feel for who knows their stuff.
3. Know your limits
Before auction day, you should have a discussion with your real estate agent to set your reserve price. This is the minimum price you’d be willing to sell your property for.
On auction day, the auction becomes “live” once the reserve price is reached. Once it is live, you agree to sell to the highest bidder.
If it doesn’t reach the reserve, the auctioneer will have a private conversation with you to see if you’re willing to lower your reserve price. If you do, it will go to the highest bidder so far. If you don’t, the property will be ‘passed in’. This means it won’t be sold at auction. You’ll still have an opportunity to negotiate further with the highest bidder if both parties want to try and reach an agreement.
The reserve price is your security. It means you won’t be forced to sell for less than you want. That’s why it’s crucial to have the discussion with your agent ahead of time, and feel confident that you’re setting the reserve at the right amount. Don’t set it lower than you’re comfortable with.
4. Get prepared
Make sure everything is in place for the auction to run smoothly on the day.
Generally, there will be a chance for the buyers to inspect the property immediately before the auction begins. Your home should present immaculately, with any clutter tucked away.
Let your neighbours know when the auction will be held. It’s a courtesy to them, because the street will likely be full of cars. It might also help you if they choose to make themselves scarce, ensuring that there won’t be a lot of background noise.
You and your agent or auctioneer should establish where the auction will be held. You’ll need a large open space, usually a driveway or garden. This area should be well tended and cleared of any unnecessary objects. If people are looking at patches of weed or a rusting bicycle during the auction, they’re less likely to want to bid high.
5. Set up your supports
Your agent will let you know if you should be at the auction. Most of the time, it’s recommended to stay offsite but in easy reach. You don’t want the buyers to see your body language and guess what price you’re hoping for.
Wherever you are, consider having a friend or family member with you. Auctions don’t last very long in reality, but it can feel endless when you’re waiting for news. An emotional support person is invaluable at such times.
Auctions can be stressful, but they can also yield some amazing results. Especially in today’s hot market, it might be the best decision for you. Talk to your agent to help you make the decision before you sell.