SELLER'S GUIDE TO AUCTIONS

What is a real estate auction?

An auction is a method of selling a property through the process of public negotiations to determine the true market value of the property at that time.

The benefits of an auction

• Sense of Urgency: The auction day deadline sets a finite selling period and creates a sense of urgency amongst buyers.
• Buyer Competition: An auction creates the conditions for buyer competition - which can lead to a premium price.
• Options: You remain free to consider any offers before Auction day, if you choose to.
• Certainty: Buyers must bid on an unconditional basis - no complicated conditions.
• Control: You are in control - you set the reserve and select the possession date that suits you.
• Tracking Interest: All salespeople can register potential buyers for your property so we can track interest and contact all interested parties in the event of a pre-auction offer.
• No Price Limitations: By marketing without a price you are never limited by an asking price that is too high or too low, so you can attract a wider range of buyers.
• Feedback: Your salesperson will provide regular market feedback to assist you in setting the reserve price of your property.
• Preferential Online Ranking: Properties for sale by tender or auction, along with those meeting our “promotion” criteria, appear ahead of others in our website search results.

We Recommend:

That the Auction process is supported by an appropriate marketing programme to create a high profile and attract as many buyers as possible before the Auction day.

Open homes scheduled throughout the marketing period will allow all potential buyers easy access.

Setting a reserve price

The reserve is the minimum figure that you instruct the auctioneer to sell the property for. This figure is generally established as a result of feedback from interested parties during the marketing period and is usually set by you prior to the auction.

Understanding the bidding process

The auctioneer will open the bidding by asking for an opening bid and will then nominate the increments by which the bidding can be raised. For example, an opening bid is placed of $200,000. The auctioneer then nominates for the bid to go up in increments of $10,000, meaning that the next person that bids will be offering $210,000.

People will make bids by attracting the attention of the auctioneer - raising their hand, calling out their bid or nodding their head when they catch the auctioneer’s eye.

Once bidding reaches your reserve price, the property is “on the market” and will sell to the highest bidder when the bidding stops.

If the reserve price is not reached, the property is passed in to the highest bidder. The highest bidder is then offered the first right to purchase the property immediately after the auction at your reserve price. If a sale is not completed immediately following the auction, the property will be offered for sale to all other interested parties.

Selling before auction day

In most cases you can sell your property before auction day. This is called a pre-auction offer. A buyer may submit an offer on the Auction Particulars and Conditions of Sale Agreement prepared by Duncan Realty. If this offer is acceptable to you, all other registered buyers will be contacted by your salesperson and are given the opportunity to bid by bringing the auction forward.

Note #1: Because interested parties must be in a position to bid on a cash unconditional basis at the auction, they are advised to organise pre-approval through their bank or mortgage broker and bid up to a price they are prepared to pay.

Note #2: If a bidder has a property to sell, they have two options for placing a bid.

1. If they are in a sound financial position they may arrange bridging finance to cover any delay in settling their property or 
2. They may request a longer settlement date, giving them time to sell and to settle their property.