Author // Georgina Auton, Place Graceville
There are multiple ways to sell or buy a house and for the average punter who has zero real estate experience, it can get mighty confusing.
We spoke with experienced agent Gary Eaton who provided his advice for both sellers and buyers when it comes to auctions.
From the seller’s perspective
There are so many reasons why a seller should consider an auction as a way to sell their house.
Gary says that the main one is because when the hammer goes down - it’s sold under the conditions set by the vendor and agent.
Unlike a typical sale, there’s no cooling-off period and the transaction is transparent and straightforward.
This means that there are no conditions and finance will already be there.
All the seller needs to do is sign the contract!
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So what should you expect when selling at auction?
You expect to sell your house!
Gary says that when it comes to auction day, all of the hard work has been done.
The owner will know who’s an interested buyer and where they would position the property in the market when it comes to price.
The reserve would’ve been set prior to auction at a meeting with the auctioneer.
Should the owners be present at the auction?
More often than not, the owners are present to sign the contract when the auction is successful.
It allows the owners to gauge interest in the property as they can see the number of registered bidders, number of bids, energy of the auction and the number of people present.
This means they have all of the information required to make an informed decision on the day.
Being at the auction brings the circle to a close and completes the story they began when they first listed the property for sale.
The auctioneer can sign the contract on behalf of the seller if the seller isn’t available on the day.
What if it doesn’t sell at auction?
The vendor will then have a decision to make as to whether they let go of the property for less than the reserve or pass the property in and enable further negotiations post-auction.
This is something the agent and auctioneer can assist with.
From the buyer’s perspective
Gary says the single most important reason to purchase at auction is it’s the point in time when the buyer and seller are at highest levels of negotiation - the buyer wants to buy, seller wants to sell.
Occasionally, prospective buyers bid at auction and the owners don’t accept because it’s less than they wanted and it’s passed in.
It also ensures transparency because buyers get to see what other buyers would be prepared to pay.
An auction is when both parties are negotiable and eager to see a successful result.
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How should a potential buyer prepare for auction?
A buyer needs to be fully informed about how an auction works before they get to the auction.
Agents can assist with this and provide information.
A potential buyer needs to have their finances in order, have done a building and pest inspection, and be in a position to sign the contract.
They must also have registered as a bidder before (or sometimes during) the auction, which means bringing a driver’s licence as proof of identity.
What are some strategies for buyers?
Gary says it’s important to have a bidding strategy.
A buyer needs to have pre-ascertained their own limit on how high they can go.
They also need to decide if they want to bid cautiously and gradually creep ahead, or blow the competition away early by bidding high to begin.
The auctioneer will guide buyers on bidding increments.
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