Auctions

TO AUCTION OR NOT TO AUCTION.

When Choosing A Method For Either Selling Or Buying

a property most clients have very clear positions on how they view the Auction process.

Opinions are generally strongly for or against the Auction Method. These opinions are generally based on past experience or anecdotal evidence of family, friends or the media.

As a licensed Auctioneer I may be biased but I believe in the structure and transparency of the Auction process.

It can be a confusing and confronting experience if the clients are not guided and advised through the process. The media has played a part in the general public being uncomfortable with the thought of buying and selling using this method.

Most buyers and sellers in the markets in the last 12 to 24 month have been involved in a Dutch Auction experience due to the very hot market conditions. As buyers have been placed in a position where they are competing and bidding for a property, they have not had, what I believe is the most important and valuable component, transparency.

AS A BUYER

The Most Frequently Asked Questions Are...

What offers have been made? What will it take for the sellers to sell? and what has the level of interest in the property been like? All of these questions are visible in the auction process as a reserve is set, the competing buyers can see the level of interest at the Auction, and all offers in the form of bids are public.

AS A SELLER

The Most Important Items Are…

What is the best price I can get for the property? How long will this take? and what is the cost to achieve this? The Auction process is a more controlled process with a set timeframe, structured marketing campaign so the clients have set costs and an Auction ensures multiple buyers to achieve the highest possible price.

Like all methods of buying or selling there are pros and cons for the Auction Method.

Pros and cons of selling at auction

Pros

Competition. Auctions create a sense of urgency based on a set “end date” for the property, and this competition can often lead to higher bids and a higher sale price.
Protected by the reserve. If you decide to sell your property via auction, you are protected by the set reserve price, which represents the lowest offer that you’re willing to accept.
No cooling-off period. The highest bidder that makes an offer above the reserve is obliged to purchase the property, resulting in a quick and definitive sale.
No subject-to clauses. These clauses are not available with an auction, as prospective bidders need to do their searches and inspections before auction day.

Cons

Higher costs. Most auctions require a marketing budget, as well as auctioneer and real estate agent fees.
Rule out certain buyers. Some buyers are not comfortable bidding at auction or may not be able to meet the stringent buying conditions.

For more Information, please see the links below or contact me to ask any further questions on any method of buying or selling property.

How To Approach An Auction In Western Australia | REIWA

Real estate auctions | Department of Mines, Industry Regulation and Safety (commerce.wa.gov.au)