As a vendor, there are many pitfalls to be wary of before and during a property auction. Here are some common pitfalls to avoid!
Receiving multiple offers before auction
Accepting an offer means you are denying any chance for competing buyers to force up the sale price of your home. At the same time, auction day could mean the property is sold for less than what you are offered in the lead up.
Offers made prior to auction must be exceptional in price and favourable in all conditions, as buyers are not just purchasing your property – they’re purchasing the right not to compete with the market. It is also important to understand how many genuine buyers you have when considering an offer made prior.
No bids on auction day
A good agent will be keep tabs on buyer interest and be able gauge buyer sentiment to determine if it’s going to be a successful auction. Auctions thrive when there is competition for your property and fail when an agent has misread where your property sits within the market.”
A well-run marketing campaign should convince prospective buyers to spend more on a property at auction through competition and expectation of ownership.
Your agent should be able to advise if you should not proceed with an auction sales method if buyer interest is lower than expected.
A poorly-timed auction date
If your auction clashes with a major sporting event or holiday, says Mr McCann, it can seriously reduce the number of prospective buyers at auction. If your property is a family home, an auction over the Christmas or Easter period would be ill-advised given many families may have booked a trip away. Be sure to check your dates.
Your property doesn’t reach its reserve and you choose not to sell
If your home doesn’t reach its reserve price on auction day, you may choose not to sell and try a private treaty sale method. The decision to re-list your property shouldn’t be taken lightly.
Re-listing your home after an unsuccessful auction campaign provides information to prospective buyers, including how much your property was passed in for. Your agent needs to come to you with a fresh marketing strategy to prevent perceived/incorrect opinions amongst buyers about why the property did not sell.
Lowering your reserve to ‘meet the market’
You should not have to lower your reserve if your property has been priced realistically.
It is a good idea to compare local agents in your area to get a sense of what this estimate may be, and don’t necessarily go with the agent who gives you the highest price guide, because it could leave you disappointed on auction day if they have over-quoted to win your listing.