Selling by auction is an exclusive agency agreement and is therefore also subject to the 90-calendar day agreement period. The auction process requires the seller to pay the agent to arrange effective marketing and advertising plans to maximise exposure of the property and the auction date to potential buyers.
Under the auction system, the seller agrees to pay commission to the agent if the property sells before the date of the auction, at the auction 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. 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, directly after auction. There is an ability to set a reserve price and a settlement date to suit the seller.
As the reserve price is not disclosed it gives the seller a chance to test the market. A written marketing plan with pre-agreed appointment times enables the sellers to arrange 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 see the purchasers as competition rather than the seller. Auctions create a competitive environment. With sale by auction in Western Australia, 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 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 regarding this matter as they should be able to provide a tick list that helps.
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 for the day.
For most, the spectacle will be the main draw as well as the eventual selling price so confidentiality is of the utmost importance. The REINSW suggests that you do not disclose or discuss your reserve price with anyone except your agent/auctioneer.
A sale by public auction is one of the most exciting, effective and rewarding methods of buying and selling property.