Selling at Auction..Your guide in what not to do…
The big sale day has finally arrived.
While most people are only too happy to tell you what they think your home is worth and how you should go about selling it, there is still such a thing as auction etiquette.
That means as well as there being a list of things you should do in preparation for selling your home, there’s also a list of things you should not do when selling your home at auction.
We asked three industry experts to tell us what vendors should not do on auction day. Here’s what they shared.
Don’t interfere with genuine bidders
President of the Real Estate Institute of Australia (REIA), Peter Bushby, says homeowners must never interfere with genuine buyers. It undermines the auction’s integrity and can scare away prospective buyers from making real bids.
“When you interfere, you can scare away real buyers.”
“Don’t arrange for your friends to bid to get the price up, or even bid yourself. This is wrong,” Bushby says.
“Most auctions will have as a condition that any vendor bids will be made by the auctioneer, and the limit is two.”
Don’t reveal your ideal price
Although it may be tempting, you should resist disclosing the price that the property will be put on the market for on the day of auction.
It’s always wise to remain tight-lipped about your selling price.
“Don’t openly reveal your expectations,” says Bushby, “and certainly do not reveal the reserve price even to family and friends ahead of the auction, as rumours can spread quickly,” he states emphatically.
Inadvertantly or otherwise, you also should avoid talking up the property price by revealing your own expectations as to what it will sell for. According to the REIV President, this too has the potential to scare away buyers, “particularly if your expectation sits above what may be paid.”
Don’t over inflate your expectations
“While it’s good to be positive, it’s even more important to be a realist,”
“Although vendors don’t like to hear this, the only thing that generally stops a property from selling is its price,”
Bushby agrees, and says vendors should wake up on auction day guided only by the pre-auction buying market.
“The lead up to auction usually sets indications on the pricing, so listen to the feedback you get through your agent when finalising your reserve price ahead of the auction,” says Bushby.
Try to keep price expectations as realistic as possible.
Don’t let stress get the better of you
Dang, the auction has been a fizzer. But that doesn’t mean the game is over,
“The game is not over, you are simply entering the next stage of the auction campaign,”
Don’t put the property back on the market too soon
Anthy Paradisis says many properties are passed in at auction to the highest bidder and this person has the first right to negotiate.
So there’s no need to announce the property is on the market while the auction is still live unless, of course, it really has reached its reserve price and the bidding is hot.
“The highest bidder receives first right to negotiate to meet the vendor’s reserve price, or best case scenario price, or even the high ball price that’s set in this circumstances,” Anthy explains.
The highest bidder has the right to negotiate the purchase price.
Most negotiations meet at halfway price points. So if, for example, a property passes in at $1.1 million and the vendor’s realistic price expectation is $1.15 million, an agent should specify the vendor’s asking price is $1.2 million, Anthy says.
“The worse thing a vendor can do on auction day is to be conditioned by their agent to accept an unsatisfactory offer after an unsuccessful campaign.
“Most vendors do not realise they hold the trump card. The most important signature on the sale contract is their own, not the purchaser’s as a sale is only complete once the vendor has signed.”