Commonly Asked Questions When Considering Listing By Auction
"Why is a price not quoted in auction promotions?"
This enables prospective purchasers not to be deterred by price considerations, when first becoming interested and making their initial investigations regarding the property. While this may lead to an ever-optimistic view by them as to the likely eventual sale price, they have time to review their own position carefully, to make their financial arrangements, to revise their thinking at auction. They have the confidence engendered by seeing other interested buyers competing. The successful bid, after all, is only one bid ahead of another bid from a competing bidder. The auction situation stimulating competitive bidding takes the best advantage of that.
"How long does the auction process take?"
Once a decision has been taken to proceed to market by the auction method, the selling period normally encompasses three to four weeks, depending on the requirements of the particular property, and wishes of the owner.
"But surely myself and my family are more inconvenienced by inspections than if we were selling by fixed price?"
No, we really don’t believe so. Although the number of enquiries will be greater, in view of the delay between the advertising promotion and the actual sale date it is possible to organize inspections so as to minimize inconvenience. Remember too, that the buyer is less inconvenienced as well, as he has additional time to appreciate the property better and to act with extra confidence of having had outside professional advice, if he seeks it.
"Isn’t a fixed price much easier?"
It can be, but luck rather than applied marketing techniques would make it so. If Lady Luck doesn’t play a part, the delays and uncertainties can lead to a later wish to put the property to auction. That desire is compromised by public knowledge of the asking price, and much of the purpose of auction is lost. Buyers become understandably hesitant, too, when they become aware of the lack of success of the previous marketing attempts.
"Can I dictate the terms at the auction?"
Yes, and that, as we see it is one of the real advantages. In the normal fixed price situation, it is the buyer who makes the first move, and therefore his offer is based on what suits him. Under auction conditions, it is firmly accepted by the bidder, his advisers and those providing any additional finance that it is a cash, unconditional proposition. Our standard auction Conditions of Sale forms have been used by hundreds of Solicitors for many years and cover general terms acceptable to vendors, to which are added those applicable to the individual transaction, approved by you.
"Can I sell prior to auction?"
Yes, and this is not an uncommon occurrence. Any offer received by Harcourts is, of course, submitted to you, and our recommendation which would accompany it is based on a complete thorough assessment of other buyer interest at the time, and future prospects.
"Doesn’t an auction give the impression that I am a desperate seller?"
No, It is accepted as a method of testing the market in the case of a particular property, and it is, as well, a widely held and well-based theory that it is the most interesting properties that are offered for sale by this method. As well, the fact that Trustees so often use the auction method to fully test the market in the interest of beneficiaries must itself be a recommendation.
Buyers don’t like auctions
Many buyers would make this statement and it’s normally because they are scared they might pay too much due to the competition at the auction. Wouldn’t this be a great situation for you to be in as a seller? With a quality marketing plan we will attract "genuine" buyers to your property and then use our skills to assist them to bid and buy under your terms – not theirs.
Too much pressure/stress
No matter which sales strategy you select there will be stress involved. Often the stress revolves around the issue of price. An auction campaign allows you to avoid the price issue as the seller and judge each offer on its merits. The only decision you make is either yes or no and you can make this decision confident in the knowledge that, each buyer has been extended to their maximum.
"If friends or neighbours express interest, what do I do?"
Our suggestion is that you allow them to see the house. Neighbours in particular are interested parties, and they may well have people whom they believe will be interested.
"Must I sell at less than an acceptable price on auction day?"
No. You place a reserve price on the property and if bidding does not reach this figure the property is passed in. We will make specific and detailed submissions to you just prior to the sale regarding what we consider, in your interests, this reserve price should be. We will of course by then have had the advantage of having seen the property on a number of occasions and of being thoroughly informed as regards comparable sales, and current market conditions, together with a picture based on the reactions of individual interested purchasers.
"Should I disclose the reserve prior to auction, if I am asked?"
It is vital to satisfactory results that you do not enter into any discussions with prospective buyers (or anyone else) regarding your expectations or the advice you have received from us. Likewise, we will ourselves never disclose a reserve, for the same reasons and again, in your interests.
"What should I do if I am approached by another real estate agent?"
This is most unlikely, as the auction marketing programme entails a sole agency and the Real Estate Institution Code of Ethics requires of an agent that he contacts the sole agent rather than the owner. Any such enquiries should simply be referred to us.
"What happens if my property is not sold at auction?"
Not all properties are sold at the actual auction. Some are sold either prior to or shortly after the event. Our sense of responsibility to you, and our interest in the property, will be sustained until a satisfactory sale is negotiated. There are only two reasons your property won’t sell. The fact that there is no buyer at any level over the next 60 days and I think that you will agree that is most unlikely. The second reason is if the offers presented are not at an acceptable level and you decide not to sell, and as the property owner, you should have that right.