THE GUIDE TO SELLING YOUR HOME
Step 11 - Selling by Auction
An auction is when prospective buyers come together to bid on your property, with the highest bidder being successful, subject to the bid exceeding your reserve price (the lowest price at which you are prepared to sell the property for).
Before the auction
| 1. |
Contracts are prepared by your solicitor/conveyancer as ordered by your agent |
| 2. |
Your agent will advertise your property and market it professionally |
| 3. |
Open for inspections will be held for prospective purchasers shown through by your agent |
| 4. |
Make sure you understand the terms and conditions of the auction |
How the auction starts
The auction will begin at the allocated time with the auctioneer welcoming people, and announcing that the auction will begin. They will highlight the key features of the property before asking for an opening bid.
Bidding
Once the auction is in progress buyers can bid at any time, either verbally or non-verbally, usually by raising their hand.
The auctioneer normally informs buyers of the price increments in which they will accept bids. At the beginning it's not unusual for bidding to be made in $10,000 or $20,000 increments before the bidding begins to slow down. The auctioneer retains the right to accept a bid and the price increments for which a bid cab be made.
What happens when bidding stalls?
When bidding stalls, the auctioneer will consult you and ask if the reserve price has been reached and if you are happy with the result.
If the reserve price has been met, the auctioneer will announce it is 'on the market' and bidding continues until it stalls. The auctioneer will then solicit final bids, repeating the highest bid. If there are no further bids he or she will say "Going once, going twice, going three times, sold!" and bring down his or her hammer on the word "sold". The property is then sold to the highest bidder.
When the reserve price has not been met, the auctioneer will give the crowd has one last opportunity to bid. If bidding stalls and there are no more bids, then the house is considered to be 'passed in' (not sold). If the house is passed in, the highest bidder usually has the first opportunity to negotiate with you and the agent. the negotiations begin immediately after the auction.
What happens if the auction is successful?
The successful bidder will be required to sign the contract and pay a deposit on the spot, usually 10% of the purchase price (unless a different amount has been negotiated with you prior to the auction).
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