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Auction v Tender!

Selling Your Home at Auction

Why Sell Your Home At Auction?

When selling your property, there are quite a few different methods of sale you can opt for. However, selling your home through the auction process has many benefits:

  • Experience: Harcourts have successfully managed over 4000 auction programmes

  • All negotiations are open and transparent

  • All of our auction programmes are managed by fully trained, experienced negotiators

  • With vendors providing builders’ and LIM reports, this assists in buyer confidence

  • Your property gains a specific, high-profile marketing programme. An auction promotion creates a finite selling time for interested buyers who are forced to act with more urgency

  • Your property obtains prominence through database and e-marketing

  • No price marketing attracts a wider range of buyers

  • You receive more market feedback

  • Deadline Auction Day - creates a finite selling time

  • An auction creates potential for a premium price through buyer competition

  • You control the selling price with a reserve

  • Your property is not undersold 

How You May Feel As The Marketing of Your Home Progresses 

Just prior to auction date

You may feel nervous because you have a feeling of being “on show” on the auction day. Remember, there will be no surprises and your weekly review meetings will sum up all the activity so far. You’ll know what’s happening all the way. Myself and the auctioneer will have a meeting with you to help you set a reserve price - it's very important to get this correct!

The auction day

The “on show” nerves can come again. It’s not you or your house on show, and it should not be taken personally if no one bids. See it as a time of gathering up all the activity and results that have taken place up to the auction day. Many auctions are negotiated soon after the event.

After auction day

The activity that reached its pinnacle at the auction may have died down. I will be working with all those who went through but didn’t bid or came to the auction. They may now be in a position to make an ofter to you.

Price

We don’t put a price on straightaway – it's better to keep working with the interested parties. Once that interest has been followed up, you will then put a price on the property. Have patience here – a high percentage of auctions are bought within a few days of the auction itself. Yours may be one of them.

Ongoing marketing

The things you can do to help:

1. Keep your home looking its best.

2. Provide all the help you can with price, taking into account the information that you have been given.

3. Talk to your consultant. Let them know what you are thinking.

4. Contribute to any part of the marketing you wish: better headlines perhaps, or any ideas you have and would like to use. 

Negotiating

The manager, auctioneer and myself have been specially trained in negotiation and, if it is necessary on the auction day, we can help you through the negotiation process. We will be trying to get you the highest price possible that is available in the market place. We will do this with pre-auction offers, on auction day, or immediately after when necessary.

Use all the information you have:

1. Number of people through

2. Time on the market
3. Marketing that’s been done

4. Open home activity

5. Price: Where did it come from? Get feedback from me on what is happening in the market place. 

Auction 12-Step Summary

1. Prior to marketing

It's important to understand the advertising schedule, and to confirm open home dates; consultant meetings; a reserve-set meeting and of course the date of the auction itself.

2. Caravan presentation

The presentation of the property needs to be the best it can possibly be. The process starts in earnest from the day when all sales consultants visit the property (we call that our ‘Caravan’).

 

Consultant enthusiasm for an attractively presented property ensures a maximum of buyer visits. Having the house ready from commencement will give the process fantastic impetus. Prior to the Auction the auctioneer will also familiarise himself/herself with the property in order to consolidate his/her thoughts for an enthusiastic property description on auction day.

3. Understanding market value

As your consultant (listing agent), I have less than a month to achieve a clear understanding of how the market is responding. It is important to analyse as much current information as possible so that price expectations can be changed up or down if necessary. It also helps with setting a market-driven reserve on auction day. If there is any information already available, e.g. a registered valuation, a previous offer or other company appraisals, please discuss this with me so that an objective marketing stance is not compromised during this vital period.

4. Market feedback is important

The average buyer undertakes a considerable amount of research prior to negotiating. Studies show that buyers will visit in excess of a dozen homes; which means on average they will have a good understanding of the current market, with some knowledge of most properties that are for sale in their area of interest. Therefore opinion or feedback from prospective purchasers during a marketing programme on where they see the ‘price’, can be absolutely invaluable. It is important to look for comments that form a pattern when analysing market opinion. Contacting every visitor that sees the property during the sales process is time-consuming for us, but it does allow me to interpret the market.

5. Consultant – reporting back

This is a crucial part of the Harcourts auction programme. Feedback from the consultant will consist of regular phone calls, a weekly meeting (if possible) and a comprehensive weekly written report. We ensure that the decisions a vendor makes are based on accurate information. It is our mission to keep our vendors fully informed throughout the process so that decisions are objective and market driven.

6. Strategy meeting

Normally conducted one or two days prior to auction day. This is an ideal time to analyse all the feedback and activity that has happened relating to the property, and to set a game plan for auction day. At this meeting I may be accompanied by a manager, auction manager or auctioneer.

7. Understanding conditional offers

The great advantage of auction is that the sale is unconditional on the fall of the hammer. Therefore an acceptable pre-auction offer also has to be unconditonal. If a purchaser wants to make a conditional offer they are welcome to submit it if the property does not sell at auction. Other interest is then assessed, as is the nature of the conditions.

8. Understanding offers prior

Our goal is to have as many prospective buyers as possible bidding on auction Day. If a purchaser makes an offer that is acceptable prior to auction day, Harcourts’ policy is to advise all would-be purchasers that the auction will be brought forward. This ensures a transparent and fair process for all parties, and won’t disadvantage other prospective purchasers who show interest. The end result will ensure that the property is sold at the highest possible price. There are normally three reasons why people make offers prior to auction day. Firstly, and most importantly, they want to take control of the process, eliminate competition and stop the marketing process. Secondly, they may need to buy a home within a required time frame.

Thirdly, they want to test the price. Often prior offers are low, which is not necessarily of concern since auction bidding often starts low anyway. We will encourage a would-be purchaser to wait for auction day; but rest assured that all prior offers will be communicated to you. All offers must be in writing, and only acceptable offers will trigger the pre-auction offer process. A purchaser’s perception of price does often change during the sales process, and more often than not this perception will have a more emotional edge come auction day.

9. How to answer buyers questions

Even though we are the appointed agents, there are purchasers who attempt to circumvent the process by contacting the owners directly. In these circumstances it is important that any answers given do not prejudice the auction. Invariably most of the questions will concern price. Below are some examples of these questions, but please discuss these with me – our job is not only to sell your property for the best price, but to also make the process as stress-free as possible.

“I was wondering what price you’re looking for to sell your home for?”

Answer: “We have chosen the auction process to see what the market wants to pay – we haven’t really talked about price yet. We just want the house sold. Give our consultant a call and they will be glad to help.”

“Your auction is not for two weeks. Will you sell prior?”

Answer: “Yes, but please contact our consultant to discuss it with them – they are handling the sale process.”

“You must have some idea of value. Surely you’ve had an appraisal or valuation?”

Answer: “We have stayed away from the price debate as we do not want to be sitting on the market for any longer than necessary. That’s why we are auctioning. Your best bet is to contact our agent.”

“I am prepared to offer $X amount for your house.” (Normally this is low)
Answer: “You need to talk to our consultant. Here is their number. But that does sound exciting; we hope to see you at the auction.”

10. Particulars & Conditions

The sale at auction purchase document is known as the 'Particulars and Conditions' (Ps&Cs). The Particulars are the legal description and the conditions are those of auction and sale. This document is made available in draft form throughout the marketing programme and normally has been pre-approved by your solicitor (most solicitors will not charge for this aspect of the conveyance.)

 

The sale is unconditional in every respect at the fall of the hammer. Please note that the obligations under the vendor warranties in the general conditions will be explained to you and are the same as in any standard Sales & Purchase agreement.

Variation to Particulars & Conditions: A purchaser may request the Vendor to vary any terms in the Ps&Cs to enable them to bid, e.g. a settlement date change. This request must be accepted in writing by the vendor. This is called “Variation of Particulars and Conditions of Auction”, often referred to as an “aside agreement”. Please note: any variation pertains only to the person or persons who have applied for that particular variation.

11. What is the order of sale?

The majority of our auctions are conducted in rooms. Multiple auctions in rooms will have an “Order Of Sale” which will be available a few days prior to auction day. This order is considered and prepared by the auctioneer as part of the auction day strategy. Please note: some properties are sometimes auctioned on site and the advertising will indicate accordingly.

12. Finally...day of auction

By the time auction day arrives, the marketing programme has been completed and the best prospects for the property have been identified. It is now up to the auctioneer and his team to determine who will pay the most. We encourage vendors to be present on auction day. As with any type of negotiation, parameters can change and we cannot make decisions for our vendors. It's most important you are present to make these decisions first-hand. Purchasers can be emotional on auction day and generally the best results are achieved when decision-making can be made quickly.

 

Click here to read our 'Best Practice Guide Auction'.

Why Sell Your Home By Tender?

• Selling by tender is private and confidential - less public than an auction.

• A tender promotion creates a deadline for interested buyers who are required to act within a given time frame.

• Your property gains prominence through high profile marketing, including print and internet marketing.

• You as the vendor have a five-working-day period in which to decide which offers to accept.

• Conditional offers may be submitted.

• A tender allows you, the vendor, to have control over the terms and conditions of the sale i.e. you choose the possession date.

• A tender creates potential for a premium price through buyer competition.
• You are never limited by an asking price that is too high or too low - no price marketing.

• Extensive use of open homes during a planned timetable allows easy access for buyers.

• Weekly market feedback to assist you in establishing the selling range of your property.

• An available network of branches nationwide. Referring of out of town buyers.
• Harcourts’ powerful national and international websites are free to all our clients. 

 

Tender Negotiating

I will try very hard to make sure I negotiate the very best contract I can on your behalf. I am trained in negotiation and will always have you in mind throughout the process. I will be trying to get you the highest price possible. I will do this during the five day tender period.

Use all the information you have...

1. Number of people through

2. Time on the market
3. Marketing that’s been done

4. Open home activity

5. Price: Where did it come from? Get feedback from me on what is happening in the market place. 

 

Now That You Have Signed The Contract

Start planning. Over the years I have found some vendors feel a sense of relief, but it’s almost an anti-climactic feeling. Selling your home is an emotional process and it is normal to have a flat period soon after selling. You don’t have to have it, but some people do. Relax. You have sold using a process that involves you as much as possible. You made the right decision, now its time to move on. Your lawyer handles the process from here, but don’t hesitate to call me for anything you need or are unsure of.

I can recommend:


• Cleaners

• Electricians

• Handyman

• Plumbers

• Builders

• Valuers

Pre-settlement inspection

The buyer has the right to come and inspect the property, usually just before the settlement. The property and chattels should be the same as they were when they viewed the property. Please ensure all rubbish is removed, the property is clean and tidy and the chattels are all there and are in working order.

 

Click here to read our 'Best Practice Guide Tender'