There are several advantages of selling your home through auction. Auctioning your home has the potential to drive up prices due to the creation of urgency and by enhancing the sense of competition among buyers. When it comes to the auction contracts, these are unconditional which means you can set your own terms and conditions. There is no one who can force you to sell under the reserve price but if you are unable to get the reserve price, you also have the flexibility to negotiate with potential buyers.
While these are the many advantages of selling many high value things by auction from industrial equipment to property, it can get pretty stressful. Here are a few tips to help you stay calm when the day arrives:
1. Set your expectations
The key to having a stress-free experience on the auction day is to understand everything about the process. Nothing should surprise you on that date. Don’t shy away from asking any queries you might have to your agent and they should be happy to give answers.
In most states, buyers need to register before being allowed to participate in an auction but this list isn’t public and you are not allowed to see it. Having said that, it is still possible for you to get an idea of the interest your listing has generated by asking your agent.
2. Choose the right auctioneer
Before the auction day arrives, your agent will be doing everything in their power to properly market your property in order to generate the highest level of interest. However, on the day of the auction, everything depends on the auctioneer.
A good auctioneer knows how to read body language and conduct the auction as per the mood of the crowd. Good auctioneers know how to balance negotiation skills and showmanship. There are strict rules that bound auctioneers. They are also expected to clearly announce the terms and conditions associated with the auction.
You won’t feel that stressed when you know that your property is safe in the hands of an able auctioneer. Another benefit of hiring the services of a good auctioneer is that they can generate that little extra buzz for the auction.
Recommendations for auctioneers by agents are not that uncommon but you may also want to get recommendations from other sources. If you have participated in an auction and the auctioneer has impressed you, there is no harm in getting their details.
When you’re interviewing the auctioneer, ask them about their recent sales records and any negotiations they have conducted behind the scenes. It will tell you everything you need to know about the auctioneer and help you make the right choice.
3. Everything has its limits
Call your agent and have a freewheeling discussion about setting the reserve price. Keep in mind that this needs to happen before the auction day. Reserve price is the minimum price you will accept for your property.
On the auction day, the auctioneer will announce the terms and conditions before starting the auction. Once the reserve price has been reached, the auction goes live. Once the auction goes live, it means that you have to sell to the entity that makes the highest bid.
If the property fails to attract a price matching the reserve, the auctioneer will generally ask you to lower the reserve price. If you agree to lower the reserve price, the property will be sold to the highest bidder at that stage. If you disagree, the property is going to be passed in. In simple terms, it means that the property won’t sell at auction.
However, all is not lost. There is still an opportunity for you and the highest bidder to negotiate if both of you are willing to try to come to an agreement.
Think of reserve price as security. As per the terms and conditions of the auction, nobody can force you to sell your property below the reserve price. This is the reason you need to have a frank discussion with your real estate agent before the auction day to make sure that the reserve price is just right. If you’re not comfortable with a number suggested by someone, don’t accept it. Always choose a number you are comfortable with.
4. Preparation
Everything needs to be in order to ensure a smooth auction on the appointed day. In most cases, buyers get a chance to do a quick inspection of the property right before the start of the auction. You need to make sure that everything is immaculate and there is no visible clutter.
You should also keep your neighbors aware of the auction day as a courtesy. Keep in mind that your street is going to be full of cars on auction day. If possible, you might want to ask your neighbors to stay indoors to reduce background noise.
The location of the auction should be established between you, the auctioneer or your agent. A large open space works fine for an auction. It could be a garden or a driveway. Make sure the auction space is completely clean and free of any unwanted objects. If potential buyers get to see a rusting bicycle or patches of weed on the auction day, your auction is less likely to attract high bids.
5. Get some support
Talk to your agent about whether you should be present at the auction. In most cases, it is recommended to stay in easy reach but not at the auction site. It will prevent buyers from guessing a price by studying your body language.
You might also want to ask a family member or a friend to be with you on the auction day. Generally, auctions are finished quickly but the sheer excitement may make time go really slow for you. This is why it’s recommended to have someone to provide the necessary emotional support at such times.
It is true that auctions are stressful but also have the potential to get amazing/unexpected results. With the way the real estate market is trending, an auction might be the right decision for you to sell your property. Get in touch with your real estate agent to discuss having an auction and to help you make the right decision before selling.
