Thinking of selling your property by auction?
Common auction questions
Welcome to our guide to selling at auction This guide covers some of the questions we are commonly asked by people contemplating selling their property using the auction method of sale. It will not answer everything, as each property and situation is different, however we hope it will assist with some general advice and gives you some new options to consider for the decisions ahead. Property Brokers is proud to be the only 100% kiwi owned provincial real estate company in New Zealand. When you work with us you can be guaranteed of a team of equally committed sales consultants, marketing experts and support staff, from right across the country, working for you to get the best result. If you would like to talk to any of our sales consultants about the current market or to answer any questions you may have about selling your property, please call your local Property Brokers branch today.
What if no one registers for/turns up to the auction? Both you and your sales consultant will know well before auction day how much attention your property has received and how much genuine interest there is, giving you a good indication of how many bidders are likely to show on the day.
What is a Real Estate auction? An auction is one of the most efficient methods of selling a property through the process of public negotiation. Selling by auction is a fair and sensible method of sale because it enables you to thoroughly test the market and obtain the best possible price for your property. If you are selling a property by auction, you will need a sole agency agreement with a sales consultant, have an agreed marketing plan and establish a reserve price in advance of the auction. Why you should choose Property Brokers to auction your property Property Brokers has been instrumental in developing the auction system. We are regarded as leaders in this field and have a long list of extremely satisfied vendors only too happy to verify this fact. We guarantee that our experienced auctioneers never make bids on behalf of clients, accept bids they believe to be made on behalf of clients, or knowingly accept any bid that is not genuine.
What if nobody bids? It’s understandable that buyers might be nervous during the excitement and pressure of an auction. This is why it’s not uncommon for an auctioneer to be met with silence when asking for an opening bid. Most people are waiting to see what others at the auction might bid. In the event that no one calls out an opening bid, the auctioneer will nominate a starting bid to get the ball rolling.
Under the hammer A guide to selling at auction
What if the reserve price is not reached? In this event, your auctioneer can pause the auction and come and speak to you, the vendor. They will go back to the current highest bidder, and ask if they’re prepared to increase their offer to a price at which you’re prepared to sell. If the bidder is not prepared to do that, your auctioneer will then see if you’re prepared to lower your reserve price. That’s why it’s important for you to have a price in mind that whilst you wouldn’t be entirely happy with, you are prepared to sell at. If neither of these scenarios happen, then a sale cannot occur, and your home will be what is called ‘passed in’. What happens when the property sells? After the sale, it’s time to focus on the buyer. Your auctioneer should take them aside to start looking at the paperwork and get the contract signed straight away. It’s also time to look at how the deposit is going to be paid. As the current owner, you’ll then sign the paperwork, and the sale has concluded.
What happens if the property is ‘passed in’? If the reserve is not reached the property is ‘passed in’ to the highest bidder. The highest bidder then has the first right to purchase the property at the owner’s reserve price. If the first buyer is unable to reach an agreement with the owner then your sales consultant can negotiate with any other buyer. If these negotiations are unsuccessful the path is now open for conditional buyers to make an offer.
For all your property needs, please call 0800 367 5263 To make getting to an auction easy, we hold auctions at many of our branches throughout regional New Zealand. If you would prefer a familiar environment, you can choose to sell at your place and our auctioneers will work onsite with you.
pb.co.nz
pb.co.nz
Property Brokers Ltd Licensed REAA 2008
Property Brokers Ltd Licensed REAA 2008
28/07/20
Advantages of selling at auction
How should I prepare for my auction? Marketing
• Sense of urgency: The auction day deadline sets a finite selling period and creates a sense of urgency amongst buyers • Buyer competition: An auction creates the conditions for competitive bidding which can lead to a figure in excess of your market appraisal • Options: You remain free to consider any pre-auction offers before auction day, if you choose to • Pre-set inspection times: Are created to best present your property to buyers and to minimise inconvenience to you • Certainty: Bidders are cash buyers and must bid on an unconditional basis, so there are no complicated conditions and contracts are signed immediately should an acceptable offer be received • Control: You are in control – you set the reserve and select the possession date that suits you. If the bidding does not meet the reserve price, you are not obliged to sell • Market feedback: Your sales consultant will provide regular market feedback to assist you in setting the reserve price of your property • You set the reserve: The reserve price is set by you and is not disclosed prior to the auction, therefore attracting a wider section of the buying market • No price limitations: By marketing without a price you are never limited by an asking price that is too high or too low, so you can attract a wider range of buyers.
When it comes to marketing your property before auction, the rule seems to be more is more. The success of your auction can be largely dependent on your marketing campaign. We make it our business to ensure that your property is shown in its best form to as many people as possible. We’ll identify the key target markets for your property, and help create a marketing strategy that suits your property, as well as your budget and timeframe. Our marketing focuses on high quality photography, signage, print ads and professional copywriting. Using new innovations such as drone footage and 3D walkthroughs, we can add an extra dimension to a unique property that photos just cannot convey. Our in-house marketing team use targeted social media and digital marketing to post regular, engaging content relating to your property at optimal times for maximum exposure. Reserve Price
It’s important for you to understand and be clear on what your reserve price is, and how it’s used during the auction. Your auctioneer should be able to explain this to you in detail and they will work with you to ensure you get the best price possible for your property.
There are three reserve price figures to consider prior to auction day: What properties sell best at auction? All properties can be sold effectively by auction, but the decision usually comes down to the type of property you have and the current market. Some examples of types of properties and circumstances why this method of sale is commonly used are:
Your role on the day If you are in town, it is recommended that you attend your auction. It’s great to have you available if there are any last-minute questions that need to be cleared up. Your auctioneer will also want to confer with you depending on how the auction is going. If bidding stops below your reserve price for example, your auctioneer will want to discuss next steps with you.
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Higher end and luxury properties Unique properties If you have a definite time frame to sell in Your property is attracting a lot of interest Your property is in a desirable location Your property is new to the market You are selling a deceased estate You are selling due to a matrimonial split You have found it difficult to set a selling price
1 2 3
Your ideal price. The figure you’d be very happy to accept.
Your ok price. The figure you’d be ok with based on the feedback you’ve
received. You don’t see a win but you don’t see a loss.
Your lowball price. This last figure is basically the one you wouldn’t be
thrilled with, but given market conditions, you’re prepared to unhappily sell at that price.
Remember, at all times during an auction, you’re in control. If a bid is high enough, take it. If not, don’t. But the reason for not taking the offer needs to be greater than the reason the home is on the market in the first place.