Five tips to know if auction will bring the best price for your home.
Selling your home at auction has the potential to push the sale price sky high, and as the successful bidder doesn’t get a cooling off period, the sale of your home is set in cement once the hammer falls.
However not all homes will sell at auction. Even in a red hot market, auction clearance rates are well below 100%, and a failed attempt will cost you in terms of auctioneer’s fees, auction room rental and marketing material.
That makes it important to be sure your home is an ideal candidate for auction. Check out the five key signs to know if your home could generate those three sweet words “Going, going, gone!”
1. You live in an area with an auction culture
Auctions aren’t widely embraced across every part of the country. CoreLogic research shows Melbourne has historically had the highest proportion of auctions sales, followed by Sydney and Canberra. In the remaining state capitals, auction sales rarely making up more than 8% of all sales.
2. You own a house rather than an apartment
Houses are more likely to sell at auction than units. The same research found that over the 12-month period to September 2015, 20.4% of houses were sold at auction while only 16.5% of units were sold under the hammer.
3. Your live in a highly desirable area
If your home is in a sought-after, high value area you have a far better chance of attracting cashed up auction bidders than if you reside in a more moderately priced suburb. As a guide, in the 12 months to September 2015, the median price of houses sold at auction was $950,000 – far higher than the median value of $530,000 for houses sold by private treaty.
4. The property has unique features
A historic character home, a location with water views, or a one-of-a-kind architectural design give your home a unique quality that can make it difficult for agents to provide an accurate market value. Buyers may also be more likely to compete aggressively for these sorts of homes. On the flipside, an apartment in a multi-storey development where each unit is reasonably similar may be better suited to a private treaty sale.
5. You need to sell the place FAST!
If you’ve just accepted an overseas transfer or you’ve purchased a new home elsewhere, selling at auction can mean a turbo-charged selling period without the aggravation of keeping the place in show room condition for months on end. Be warned though, selling in a hurry could mean compromising on the sale price.
The bottom line is to speak with your real estate agent and look around at the sorts of homes selling at auction in your area. It’s a simple way to gauge if your home could attract eager bidders.
If you found this article useful, you might also be interested in our insider’s look at selling at auction by The Block auctioneer.
Did you sell your home at auction? How did you decide that was the right approach for you?