Should you sell prior to auction?
For the right property, auction is a sales process that offers a host of benefits. With a set timeframe for the campaign, it’s a method that is transparent and often achieves an excellent sales price for the vendor, particularly in a hot market like the present.
Due to current buyer demand, the process might also see the property attract offers prior to the auction date. This begs the question, should you take that offer and sell prior to auction?
Well, it depends…
At any time during the sales campaign, a potential buyer can submit a written offer to purchase that property prior to auction.
And there are a couple of reasons the buyer might do this.
Submitting on offer prior to auction date:
- Can eliminate the stress of auction day
- Removes the competition of the auction process
- Might secure them the property sooner
- Might allow them to include additional terms, such as an extended finance date in the sales contract
Whether or not you, the seller, accept that offer is a decision you need to carefully weigh.
Accept an offer or wait it out?
If the offer meets your desired sales price and affords you the convenience of moving on to the next chapter, it might be something you consider.
However, it’s important to appreciate the auction process is designed to create competition which drives the price of the property higher.
In a market like the current one, many homes are selling well above reserve, which means by waiting it out, you could potentially receive a higher price on auction day than the offer put forward.
That said, not all auctions meet the reserve, and in that case your property might be passed in. If this occurs, your agent will be negotiating with the highest bidders to try and achieve a price you are happy with, or you might re-list your home for sale by private treaty.
So what factors should you consider when it comes to accepting an offer or waiting it out?
Factors to consider
Interest – A good indicator of whether your property is set to see competitive bidding during an auction is the interest that people show during open homes.
How many people are coming through the property? Are they serious buyers, with their finance approved? Have they given the agent an indication of what they would be willing to pay?
Your agent is the best person to help you understand how much interest there is in your property and whether that’s likely to convert to competitive bidding.
The property – Properties that tick a lot of the boxes that potential buyers have tend to enjoy more competition on auction day. So, it pays to consider, is your home one with a large potential buyer pool, or are there small drawbacks to it that might deter bidders?
Your circumstances – There are a lot of benefits to the auction process, but some people do find it a little stressful. That means you may be willing to accept a decent offer if it suits your personal needs and circumstances.
Talk to your agent
When it comes to offers submitted prior to auction, a trusted agent is the best person to guide you on whether it’s an offer worth accepting, or whether it might be better to see things through until auction day.
After all, the agent is the one who best knows local market conditions, and they have also spoken to people attending the open homes.
Agents you can trust
To speak with a sales agent who prides themselves on being a trusted advisor and working on your behalf, contact our expert Eview team here.