Nov 20, 2017 11:52:28 AM

Selling your property by auction

Topics: Auctions, Buying, new zealand real estate, mortgage adviser, property auction 0

Across Australia and New Zealand, auctions have become an increasingly popular means of selling property. One of the benefits of an auction is that it places a time limit on a sale, in turn generating a sense of urgency in buyers which often leads to a higher sale price. But auctions offer other benefits to sellers too. Take a look at what these are.

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No faster way to sell your property

If you’re in a hurry to sell – either to buy a new property or to release equity for another investment – an auction is the ideal sales platform. The relatively short build-up to the auction includes an intensive marketing campaign that generates maximum exposure for the property, creating a sense of urgency that often leads to two or more buyers bidding against each other come auction-time.

Best price possible

Setting a reserve price prior to the auction means you’re protected should your property fail to reach reserve at auction. At the very least, if the property sells you’ll receive your minimum price, and if the property fails to reach reserve it can be withdrawn and resold at a later date, and you won’t be forced to accept a lower price.

Highly competitive

The aim of an auction is to achieve the highest price possible, and it’s not unusual for a “bidding war” to take place in an auction situation, particularly in a heated property market. If more than one person is bidding for your property, it can push the price up quite substantially, so there is potential for the property to sell at a much higher price. Sometimes buyers who are keen to buy the property may even put in a pre-auction offer, and if the figure is high enough you may decide to accept it.

True market value

An auction allows you to track the true market value of your property. Put simply, the property will sell to the highest bidder for the highest price they’re prepared to pay. Which means there’s no chance of you losing out on a sale because the property wasn’t priced to meet the market.

Legal and binding

Once the hammer falls, the property is sold unconditionally. The buyer cannot back out of the sale without going through a legal process. And if your reserve price is not met and the property is not sold, you may be able to negotiate a sale with any of the interested parties once the auction is finished.

Shopping around for a mortgage

Selling your house at auction is often the most effective way to truly test the market and get the best price for your property. If you need advice around buying or selling property at auction, get in touch with one of our professional mortgage advisers who have experience in all aspects of property sale and purchase. And, if you are intending to buy a property at an auction this summer, we can help you determine the maximum amount you can afford to bid.

References:

https://www.eddisons.com/articles/property-auctions/the-advantages-and-disadvantages-of-selling-your-property-at-auction

https://www.localagentfinder.com.au/blog/selling-property-by-auction-the-pros-cons/

http://content.harcourts.co.nz/blog/why-we-recommend-auctions

 


Disclaimer:

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

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