Preparation Ensures Success
As the Queensland market continues to improve, more and more sellers are considering auction as the best sales method for their property. Indeed, the numbers of auctions being conducted in Queensland is growing each year.
Using auctions as a sales method can generate exposure, achieve a strong marketing impact, and can be one of the best ways to establish the market price for a property.
From a seller’s viewpoint, the auction process begins when the seller signs an appointment with an agency giving it permission to take the property to auction. Before signing an appointment, sellers agree on the marketing program and budget with the agent, which is the key to attracting a wide range of interested potential buyers.
The first key period prior to the auction is when the marketing program is put into effect, advertising begins, and inspections or open house days take place. The REIQ recommends sellers discuss with their agent the best number of open homes and optimum time of day to present their property.
During this period, the agent will also prepare the Contract of Sale for the information of prospective buyers and for display on auction day.
When buying at auction, there is no cooling-off period so it is important that prospective buyers understand the terms of the contract which will apply to the sale if they are the successful purchaser on auction day. Prospective buyers should seek independent legal advice, as necessary.
Next, is the auction day itself. At this stage the auctioneer will request written advice from the seller as to the reserve price. The reserve price will be determined from the comparative market analysis provided by the agent and, importantly, the feedback and comments from prospective buyers during the marketing campaign. From this analysis, a price range will be established and a reserve price nominated.
If the highest bid reaches or exceeds the reserve price, the property is sold ‘under the hammer’, or at auction, and the Contract of Sale is signed immediately by the buyer and the seller.
Should bidding not reach the reserve price, the auctioneer may look to the seller for further instructions with regard to the reserve price, before ‘passing the property in’ or not selling under the hammer.
Following an auction where the property has not sold under the hammer, the real estate agent’s exclusive or sole agency (as applicable) continues for the remainder of the agency period, up to 60 days, to achieve a private treaty sale.
The real estate agent will follow up all enquiries made before and after the auction and continue to promote and market the property, endeavouring to achieve a sale as soon as possible.
