Why Market your Property for Auction

Every vendor wants to sell at a premium price for their property. It is not uncommon for some to ‘test’ the market by advertising the price of their property above a premium. On the rarest of rare occasions this may work, but more often than not can cause a negative reaction in the market. During the Auction process however, there are some very clear scenarios and unique benefits which can be expertly leveraged in order to reach that premium price.

Include all buyers

When you decide to go to auction, the whole market views the property wholly on its features and benefits, and does not judge against the price in the first instance. Many genuine buyers filter their online searches of the market by the amount they are genuinely, even conservatively capable of paying. Having the property marketed for Auction may include those buyers who would ordinarily exclude themselves.

The vendor is in control

Once the property has gone to auction the vendor has more control on the process because the buyers are part of a group of buyers and there is not a scenario of just singularly having one offer on the table at one time. No buyer is pushed out of the picture and healthy competition is encouraged. Essentially this allows for a fair market price to be achieved for both the buyer and seller.

Maximize the price

That larger pool of buyers will be individually aware of the competition and will seriously consider the top most dollar they will be willing to pay for it. You will be maximising the price by maximising the number of buyers you get through and maximizing the range of dollar amount people are prepared to pay in competition with each other. This will be most significant if the property passes in, not reaching a set reserve. It is then that negotiations can begin with your group of ready buyers.

Cash unconditional contract

At reaching the desired outcome, whereby the property is sold on Auction day, another significant benefit is that the vendor now has a cash unconditional contract. Therefore, it is not at risk of falling over due to building and pest inspections and further risk of wasting more time and money is diminished.

Significant stages for optimal pricing during an auction campaign

In an Auction there are three very clear moments where the scene is set for encouraging the optimal price on your property.

The first moment is just before and running up to the Auction day. It occurs because the buyer realises that they don’t want to compete or miss out on the property and as such they put their best possible price forward. On this occasion, a vendor would only take it off the market and accept the offer if it was at a premium price.

The second moment is at the Auction itself. Ideally in that instance, there is high competition and bidding and therefore the maximising of the price.

The third moment is if the property passes in at auction and is still on the market after the Auction. It is then that the property is priced accordingly to market feedback and buyer expectation. The vendor will not be wasting their time leaving their property sitting on the market slowly shaving it down to a realistic price.

Build awareness and lengthen time      

Marketing your property at auction can also work in your favour with regard to maintaining relevance for longer and building awareness in the market. In ‘For Sale’ marketing there is a risk of alienating buyers who may avoid a property that has stayed on the market for extended periods of time without successfully selling. The assumption can form that the property is overpriced or has some other negative feature which has caused it not to be snapped up in the first four weeks.

We often use the image below to explain the dynamic of time on market being relevant to gaining the optimum price.

By marketing your property for Auction, you can maintain control as a vendor, encourage competition, maximise a fair price, enjoy the benefits of a cash unconditional contract and establish awareness without influencing overpricing sentiment in the market.

For both buyers and sellers this process is a fair and efficient marketing style, and where both meet in the middle at Auction.