Using auctions as a sales method can generate exposure, achieve maximum marketing impact, and be one of the best ways to establish the market price for a property.
From a seller’s viewpoint, the auction process begins when the seller signs an appointment with an agency giving it permission to take the property to auction. Before signing an appointment, sellers agree on the marketing program and budget with the agent, which is the key to attracting a wide range of interested potential buyers.
The first key period prior to the auction is when the marketing program is put into effect, advertising begins, and inspections or open house days take place. The REIQ recommends sellers discuss with their agent the best number of open homes and optimum time of day to present the property
During this period, the agent will also prepare the Contract of Sale for the information of prospective buyers and for display on auction day.
The REIQ’s standard residential contracts are approved by the Queensland Law Society, are proven documents and, being written in plain English, give sellers peace of mind knowing that buyers will bid with confidence about the standard terms.
Next, is the auction day itself. At this stage the auctioneer will request written advice from the seller as to the reserve price. The reserve price will be determined from the comparative market analysis provided by the agent and, importantly, the feed-back and comments from prospective buyers during the marketing campaign. From this analysis, a price range will be established and a reserve price nominated.
If the highest bid reaches or exceeds the reserve price, the property is sold ‘under the hammer’, or at auction, and the Contract of Sale is signed immediately by the buyer and the seller.
Should bidding not reach the reserve price, the auctioneer may look to the seller for further instructions with regard to the reserve price, before ‘passing the property in’ or not selling under the hammer.
Following an auction where the property has not sold under the hammer, the real estate agent’s exclusive agency continues for the remainder of the agency period, up to 60 days, to achieve a private treaty sale.
The real estate agent will follow up all enquiries made before and after the auction and continue to promote and market the property, endeavouring to achieve a sale as soon as possible.