comet555

The time has come to sell our house. Is an auction a good idea or not?

As a buyer I absolutely hated them and pretty much ignored any properties up for auction. As a seller I still dislike them and if I went this route I would hope that I sold it prior to the date.

The reason I ask is that our agent suggested it to us an option so just trying to figure out which way to go. He did also suggest the usual method so there's no pressure.

I know this isn't a new topic but I've already read most of the threads dealing specifically with buying/selling at auction. So just hoping for more up to date advice.

Any comments from sellers or buyers on auction?

louH

I'm selling at the moment and decided to go with a tender - advantages of an auction (ie an end date - hopefully) and advantages of a private sale (room to negotiate, time to think things over etc).

Good luck with your sale

Suni&Jay

IMO you would only go to auction if
1 you had a unique property- getting the best price possible.
2 If you have to sell/desperate.
Some agencies will get you to invest $00,000's on advertising on an auction with no guarantee of a sale at the price you want, then pushing you to take a much lower offer cos you have spent so much on advertising.

comet555

Definitely not a unique property. Nice house, nice area but not overly special or one of a kind.

Not desperate to sell either. The reason the auction is appealing is because we have a specific time we would like to move out (end of July) and it seems the easiest way to get that condition. However we'd be ok if it took longer.... we just can't leave before the end of July as we have a bunch of visitors coming from overseas at the beginning of July.

I'm definitely leaning towards a regular sale as I'm just not comfortable with auctions and I refused to even look at them when I was buying. It just feels like I'd be turning away a lot of potential buyers by going to auction.

SamSi

I voted yes - but only if the market is very strong in your area and demand high for your particular size/style property (best way is to go along to Opens for similar homes and see how many people are viewing and also how many bidders there are at auctions). Research the auction clearance rates for your area over the past 3 months and also research what happened to the properties that were passed in - did they sell after auction or are they still on the market? If all the indicators are good - then my other advice would be not to skimp on the auction campaign, throw as much money into it as possible to put your home above the rest. Good luck with it all either way,

asprilla

none of the following is intended as advice at all, please don't rely on it.

very bad idea, in my opinion. Auctions are a sham designed by real estate agents to force a result. The seller is often pressured into accepting an offer that he/she would not previously have accepted. The buyer is often misguided by emotion.

Real estate agents will tell you that you are obliged to sign the contract if you are the successful bidder. What they won't tell you is that the courts won't back them up on that point... the reality is, you are only obliged to purchase a property once you've signed a contract and it is unconditional.

People who sell via auction are basically sending the message "we need to sell this property right now". That's not a good message to send.

If I was to sell a property via auction, first of all I would ensure that the auction process incurs no costs if there is no completed sale. 2nd I would be firm with estate agent from the beginning. "this is our reserve price. Don't bother coming into the house and negotiating for anything lower". Of course they won't like to hear that, because real estate agents hate hearing anything that might make their job a little harder...

If I were in your shoes I would forget about the auction idea, simply market the property as "open to negotiation" or "offers above xxx". Then just meet the market for a price.

Auctions are popular in Victoria.... I'm not sure what this tells you about the victorian property market, but I would suggest that a lot of people in victoria have been paying too much (and sometimes too little) for houses via auctions. Take a look at www.onthehouse.com.au . The VIC government won't share actual sales data with the public, but in QLD and NSW the data is available. In VIC it is only available to the paying customer. Is it a coincidence that auctions are popular in Victoria?

SamSi

In Victoria and if you buy at auction - the contract is unconditional with immediate effect. Gives good security to the vendor. Perhaps it's different in Queensland. 3 day cooling off mandatory if you buy as private sale.

comet555

My thoughts in red....

SamSi

Under no circumstances would I ever advise someone to advertise their home as 'open to negotiation', screams of desperation. If private sale is the best way forward for your area - simply state your asking price, easy for everyone.

comet555

Those prices (or lack of I should say) always annoyed me as a buyer. I didn't really look at that many that didn't give a hint as to what was looking for. It just felt like I could be wasting my time. Anything that was listed with a huge range (ie. $300k to $400k) or open to negotiation I just wasn't that interested in. On a personal note I much prefer to be open about things and just give a price.

So on that note.... if you knew what your property was worth (in the current market of course) what would you actually list it for? Is there a certain percentage that people try to knock off the price? I'd love nothing better than to just advertise the price we think it's worth and want but unfortunately I know there's a lot of bargaining involved and that everyone tries to go in lower (I would too if I was buying).

asprilla

well I think that if you are selling a property you need to have a good idea of what it's worth. You can work this out for yourself fairly easily by looking at comparable sales in the area, and considering the characteristics of your property (land size, close to transport, not too close to major roads etc... you know the kind of thing).

Or you can just ask the real estate agent. But remember - the real estate agent is simply interested in getting a sale.

You should be able to work out what your place is worth, give or take 3 or 5%, pretty easily. Then you could just stick a realistic asking price on it (5% above the value lets say) or you could say "open to negotiation" always remembering the price you're after... either way you'll get the same result if you've got a good idea of the value of your property.

Of course, a real estate agent will tell you that he/she adds value by getting the best price for the property, and negotiating offers upwards to an even higher price... heh heh.

comet555

I think I've pretty much got the value right on given what's advertised and what the sold prices are on www.onthehouse.com.au plus the reports the agent has given me. He seems to be very upfront about the price and I let him tell me what he thought before I gave him any idea what I had in mind, and we ended up agreeing.

There's a house in our subdivision that is a bit nicer but is essentially the same on paper but is listed at $60k more than what I think our should be listed for. The agent agreed it was way over priced.

I actually quite like the agent. The first time we chatted a year or so ago he told me my front garden looked like crap and I really should fix it up! That plus he seem more or less honest about the price, unlike some of the other agents listing in our neighbourhood.

asprilla

There is no "certain percentage". Always ignore the asking price, work out what the property is worth... then offer a little less.

If you list all the actual sales in brisbane over the past e.g. 10yrs, and put them next to their asking prices, you'll see that some went for 50% less than asking, and some went for much more than that. Simply subtracting a percentage off the asking price is a flawed way of making offers...because it assumes that real estate agents always price the properties realistically.

ABCDiamond

The average discounting from asking price, in Capalaba, is currently 5%

When we have been buying, I never bother with Auctions, nor with properties that do not state a price, unless I was very interested in them.

Normal sales average 72 days to sell, and the area has an auction clearance rate of 48%. Better than Mount Cottons 21% though !!

asprilla

Just remember that agents will tell you a property is worth $650 to get your listing. Then a few weeks later they'll tell you the market is only offering $550k. I wonder if they knew that in the first place...

Sounds like the guy you are dealing with is ok and you are going to price your property realistically... good luck, you'll have no problems . The problems only begin when you convince yourself that your house is worth more than what people are offering you for it....