Selling by auction is also an exclusive agency agreement and can therefore be subject to the 60-calendar day agreement period. The auction process requires the seller to engage an agent who will arrange effective marketing and advertising strategies; maximizing the exposure of the property and the auction date to potential buyers.
Under the auction system, the seller will still agree to pay commission to the listing agent when the property sells; either before the date of the auction, ‘under the hammer’ or in an agreed period after the auction. The same conditions that apply to the auction process will also apply to the tender process.
There are many advantages to selling a property at public auction, in particular; an auction is a three-pronged marketing push in that the vendor has the opportunity to sell their property before auction, on the day of auction, or in the event the property is passed in, shortly after auction.
There is an ability to set a reserve price for the day of the auction and a settlement period to suit the seller. As the reserve price is not disclosed it gives the seller a chance to obtain feedback from the market, enabling them to make an informed decision about the sale of their property. A written marketing plan with pre-agreed inspection times allows the sellers to organise their lives during the lead up period.
The auction process by its very nature creates a sense of urgency; buyers have a definite time frame in which they must act. Buyers will often see the purchasers as competition rather than the seller, as a result an Auction can create a competitive environment. With sale by auction in Queensland, all contracts are unconditional and no cooling-off period applies.
Tips for a successful auction
- Work out the appropriate advertising budget to ensure your property is widely advertised taking into account the identified market.
- Make sure the property is well presented because a potential buyer’s first impressions are crucial to a successful sale.
- Your agent will require that the contract and the accompanying statutory searches be available well in advance of your marketing campaign. Confer with your agent about this matter as they should be able to provide a tick list to help.
- Allow the agent to arrange as many inspections with prospective buyers as possible – it all creates interest. At a local level this could have a significant effect on the turnout on the day.
- For most, the spectacle will be the main draw as well as the eventual selling price so confidentiality is of the upmost importance. The REIQ suggests that you do not disclose or discuss your reserve price with anyone except your agent/auctioneer.
- A sale by public auction is arguably one of the most exciting, effective and rewarding methods of buying and selling real property.