When your property is on the market, you’ll find loads of advice flood in from family and friends about how much it’s worth and how to sell. It’s so important to take all that helpful advice with a grain of salt.
There are rules and proven pathways to auction success that you need to follow to feel great about what you achieve in your property sale.
The only people who should be leading your sale are the experts, so unless your friend is a local real estate agent working in the type of property you are selling, or are in the property sales industry, please stick to professional advice.
Here are some common ‘helpful hints’ that get passed around that just do not help at all with your auction. Please, whatever you do, don't be tempted to follow through on these ones.
No matter what the market condition you need to be grounded on price. If you expect to sell well over the reserve, you are setting yourself up for disappointment, and a sour taste in your mouth if you don’t see a crazy-good result.
That doesn't mean you expect to do badly, it’s just about being realistic. The price you get from your local research of similar houses and the estimation you get from professionals should be what you are aiming for. If a property is priced too high, it won’t sell as easily, which creates stress and can lead to further buyer hesitation, “Why has this been on the market for so long?” Being priced too high is just about the only thing that will prevent a property from being sold.
Make that your goal: Sell your property for the right price.
That way if your property sells for more, you win, and you won’t be bullied into selling too low.
On the day of your auction, the only thing that should guide you on the value of your property is the pre-auction buying market.
Don’t let your friends or family talk up the value of your property or pressure you to increase your reserve. If you were happy with the information and feedback you got on property value with your agent, to begin with, stick to that no matter what. That’s the only thing that can be trusted to comfortably steer you through finalising the reserve price ahead of the auction.
Better yet, just don’t tell anyone your reserve or your expected price. When it comes to steering away from the conversations about your property value, the best option is to stay tight-lipped.
This isn’t only about avoiding pressure or advice to go higher, possibly sabotaging your results, but also you don’t want any information leaks ahead of auction day. It can be surprising how quickly word gets passed around.
Even just a whispered rumour on your expectations may cost you big. Keep everything under wraps and let your auctioneer handle the crowd.
That’s not to say your friends and family would ever intentionally sell you out, but it can be surprising how topical discussions are around property and a casual conversation with a colleague at your sister's work can spread far and wide on the grapevine.
Be professional and keep your sale details private.
Probably the biggest worry with word getting out is that you may be scaring away potential buyers, especially if you're asking for more than they were initially going to pay. On auction day they might have reconsidered, but with plenty of planning and other properties to view, they hold the cards to be able to walk away.
Friends or family members may offer to put in false bids to drive prices up quickly. This not only is considered bad form, but it can also really hurt your overall sale. Anyone proficient at auctions will be able to tell the genuine from fake after a few bids, so they won’t trust the value of the property, anyone who is new to the auction will be scared away by the rapid rise and frequent bids.
Let your auctioneer set the pace and decide the rhythm. They are skilled experts and know how to adjust to suit the crowd of genuine bidders.
Auction etiquette: You are not able to bid on a home yourself. If you want to put in a bid, you’ll need the auctioneer to do this on your behalf, with a limit of two bids overall.
The fake bid may be the bid a genuine buyer was about to place. By jumping in you rob them of the experience of placing that bid and getting started on making a sale. Once they back down, they may not recover or feel confident in making further bids. Allow your bidders to settle themselves into the lower prices and get a feel for how things work. You can’t expect them to jump in at the high price end without any experience, let them test the water.
If buyers are new to auctions, they’ll need those lower prices to gain confidence and get comfortable placing bids.
Many people feel like it’s game over if an auction fizzles out, it’s not the case at all. You have interested parties on your doorstep, it’s now time to open up negotiations and sell.
And guess what, many properties that don’t sell at auction go on to sell afterwards with top results. Keep in mind there are all kinds of buyers out there, some who have never been to an auction before, and some who have been to hundreds. Some of your buyers will feel more comfortable making private negotiations and settling on a price more quietly, so a passed-in auction works in their favour and they can name their price, which might be very agreeable.
Even if you fail to sell at auction, the reality is, your property will most likely sell within a few weeks.
It’s important not to panic if your property is passed in at auction. This happens all the time and there are processes for how to proceed. Keep your head and walk through the steps with your real estate agent.
Whoever made the highest bid will get first dibs on negotiations. This is another really good reason to keep your reserve secret. If someone knows what the reserve is they can make a high enough bid to negotiate on a sale without committing at auction.
The last thing you want to do is put the property back on the market too soon. Allow negotiations to take place and give the process time to work.
It’s important to stand your ground on a realistic expectation of costs. This is a tricky balance to get right, you don’t want to get caught pricing your property too high and sabotaging your results, but you also don’t want to accept a price below your property value.
If you have done your local market value research and trust your real estate agent is representing you correctly, then you can be confident that the price you are asking is the price you stand by.
So as well as standing up to friends and well-meaning family members, you also need to be ready to stand up to your real estate agent who may pressure you to accept a lower offer.
Your agent should be able to express your asking price in a positive light and allow room to meet any negotiations halfway. So if your example
- Reasonable sale price $1.2 million
- Auction highest bid $1.15 million
- Agent’s opening negotiations $1.25 million
- Halfway point agreement $1.2 million
If your agent is telling you to accept the $1.15 million, they are not looking out for you, they are just pushing for a close of sale. Make sure they specify that your asking price is at a suitably raised price, so you can successfully close negotiations at the halfway point and still get what you wanted for the property. It’s a way of getting a win-win feeling for everyone.
It’s your property and your sale. You are the signature required on the contract to see the sale’s completion so be sure it’s on your terms.
To get the best representation it’s so important to interview those representing your property and find the right fit. Your conveyancer will be able to look over your contract before your sale and ensure you are getting a fair go.
Developers are known for spending big money on property because they know what they want and how much value they can get from the right location.
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