How do you choose whether to put a price on your property or go to auction? There are a few simple questions a seller can ask themselves to help with this choice. They are
- Is my property unique?
- Is my property hard to price because it is so unique?
- How many other properties are on the market with similar characteristics to my property that buyers would be comparing with?
An agent can tell you exactly what market conditions are like.
- Is there a shortage of your type of property on the market?
For example in the middle of winter less people sell but this can be the best time to sell if your house faces north or west and gets loads of sunshine. If there are more buyers than sellers it is the perfect situation.
- Does your property have a view, or is it in a highly sought after position?
Most agents will promote the auction process if your property has either or both of these features. If your house has a characteristic that will lead people to get emotionally attached and thus carried away at auction, go for the auction!
- Is there any number of properties on the market like yours?
Think about what you would do as a buyer. A buyer will look at everything in their price range that seems comparable and if there are a lot of properties like yours on the market, choosing to go to auction could be a mistake. Remember buyers have to do all their inspections prior to auction day with no guarantee they will get the property. When there is plenty of choice for buyers, buyers will tend to look at properties with an asking price before they look at an auction property and spend money on solicitors, pest inspections etc.
Another reason for a vendor to go to auction is time constraints.
- Do you need to be sold in 4 weeks?
- Are you going overseas for work and in a hurry?
- Are you financially strapped and need out?
The auction process puts an end date on the process.
