Selling By Auction Vs Fixed Price

For sale by Fixed Price - Advantages

• Can have a greater appeal to purchasers as buyers are more familiar with the process
• Time frame flexibility - the right purchaser may appear in a time period longer than required for a traditional auction period of 4 weeks.
• Less stress for vendors and purchasers alike.
• More flexible terms and conditions for purchasers that are not possible to be used under the auction method which relies on an unconditional sale.

For sale by Fixed Price - Disadvantages

• No set date for purchasers to compete with each other as under the auction method.
• Conditional contracts may not be in the vendors interests - subject to finance or builders inspection for example
• Inability to negotiate the selling price upwards when only one buyer is interested in the property.
• Average days on market is 139 in the current national climate.

For sale by Auction - Advantages

Control – you control everything from the day 1 through to the auction date and time. What terms you will sell under, what deposit you will take. All buyers must turn up on the day and be in the position to sign an unconditional contract.

A 3 phase marketing campaign offers enourmous flexibility & options, you can sell prior to the auction day, sell on the auction day & if then required a marketing price can be set and sold after auction.

Auctions are the most successful in selling your property within a set time frame. It uses a properly formulated marketing program designed to get the best offers from buyers who are looking.

Increasing interest from would-be purchases is made easier because an auction date creates a sense of urgency and maximizes marketing effectiveness.

Potential buyers are encouraged to enter into pre-auction negotiations. Many properties are sold prior to the auction.

Disruptions such as inspections can be set and minimized to reduce the impact on you and your family. The seller knows exactly how many open for inspection days to plan for.

Auctions are generally held on site which maximizes the interest and selling potential of your property prior to the competitive bidding process.

Auctions are the best way to find out exactly what the market is willing to pay for your property. It avoids the risk of setting the price too high or too low. They encourage the best price the market will pay.

Auction contracts are unconditional meaning that if the property is sold on or before the auction date, the contracts are final and can not be subject to finance or inspection (see disadvantages). Selling at auction also means you are assured of a set settlement period.

Your property has no “price tag” therefore buyers are not comparing your property on price alone. It also encourages the greatest range of buyers who may otherwise only be looking within certain price ranges.

With an auction, you have the benefit of a “reserve price” so you will never
sell your home for less than you want.

Auctions are ideal for anyone who must sell within a set time period or for properties with unique characteristics.

Average days on market for an auction campaign are 56 in the current national climate.

For sale by Auction - Disadvantages

• The process maybe seen as more stressful because of the defined time line.
• As with all methods of sale there is no guarantee your property will sell successfully at auction. Reserve price is not always met.
• The market value of your property is decided on the spot. You can never be sure of precisely how much you will get.
• Auction contracts are unconditional and can’t be subject to finance or inspection which may not suit some buyers.

Overview

We firmly believe all properties need to assessed on an individual basis. Then a detailed discussion about personal requirements in selling to be held before any decision is made as to the method of sale.

 

Buying at Auction

Auctions are held either on-site or in-rooms. It is essential that you have read and understand the conditions of sale by public auction and that your finances are in order.

If you have any doubts as to the auction process or contract conditions it is recommended that prior to auction that your solicitor review all documentation..

If your bid is successful, you are required to pay the deposit and sign the contracts immediately.

The method of and amount of deposit payment varies for each property - consult with your PRDnationwide agent beforehand. Each State is different, so consult your agent, but there is generally no cooling off period, you are now committed to buy.

If the bidding does not reach the reserve price, the house is not sold, and is termed "Passed In". The property is now available for negotiation by any interested party.

Deposits

By law, all deposit monies must be banked into an official trust account on the next day they are received or by no later than the next business working day.

Real Estate agents do not receive any interest of benefits whatsoever from holding deposits on behalf of the seller.

When is the Property Yours?

It is important for buyers to recognize that the legal process governing what happens after an offer has been accepted varies between States. It can be a lengthy process.

The property does not become yours when you hand over the holding deposit. It is not until both parties have signed the contract and it becomes unconditional and binding that it is time to celebrate.

Importantly successful bidders are required to ensure that the property has insurance coverage from 5pm the next business day after the contract date (Qld).

PRDnationwide real estate agents are professionals and will keep in touch throughout the legal process to advise you of any developments.