Auctions are an extremely effective way of marketing. They give the seller the greatest opportunity to obtain a premium or a fair market value while creating buyer competition, putting buyer against buyer. This provides an open and fair arena for competition on the auction day.
Auction provides a structure to the listing process, and is regarded as the premium choice of marketing. Should an auction listing not sell during the auction programme, you will have increased your chances to sell the property as an exclusive (price by negotiation or fixed price) due to the enquiry and buyer activity generated. Here are some reasons why it works:
The seller sets the terms, conditions and deadline.
This auction-oriented target marketing puts the `spotlight' on the property, adding a competitive edge that strongly favours the seller.
The property is neither overpriced nor undersold; its value is determined by the market and individual buyers.
The `no price' aspect will attract more genuinely interested, cash-in-the-hand buyers.
It allows sellers to plan ahead in the knowledge that a specific date has been set for the sale of their home. A cash buyer means the seller can proceed immediately with their goals. A sense of urgency is created by the set timeframe, bringing interested buyers to a point of decision.
The level of market interest will help the seller gauge the reserve price, with the real possibility of achieving a premium price. The seller has the option and may decide to accept a cash offer prior to auction day. Those who attend the auction will be focused on establishing the maximum price they will pay, not how little the offer should be.
The seller controls the terms of transaction and actively participates in the sale process. A successful purchase requires a payment of a deposit on the day, usually 10% of the purchase price. If the property is passed in, it will be exposed on the open market as an exclusive listing at a saleable price established from the market feedback received throughout the auction process.