Newcastle Living Magazine

Common Misconceptions About Auctioning A Property

Over the course of my career, I’ve been asked many questions about auctions. While they’re more common in today’s real estate landscape, there are still many misconceptions about the process.

Here, I’ll share some insights and answers to frequently asked auction questions.

I’ve been told auctions are really expensive compared to normal sales, is this true?

Many vendors have the preconception that auctions are quite an expensive exercise. In reality, the only additional expense you have from choosing auction as opposed to private treaty is the auctioneer cost. Whether in rooms or onsite, the auctioneer is the only real extra cost – and this will vary from $500 to $1000 depending on who and where.

Can I sell before auction?

Absolutely. Selling before auction is quite frequent and this is something you can discuss with your agent when listing your home for auction. Your agent will guide you and make recommendations if they feel accepting an offer prior to auction is beneficial to you based on your situation.

What happens if I don’t sell on the day?

If your property doesn’t sell on auction day under the hammer, you have until midnight the day of the auction to continue negotiations and exchange under auction conditions. Post this, you can enter into negotiations with any interested parties and/or put a price on the property you’re happy with and is based on market feedback and sell via private treatypost auction.

How do I set a reserve?

Setting the reserve is a simple process, and at Ray White Newcastle Lake Macquarie we want you to feel completely secure that the auctioneer and agent are working together in the background to have a handle on all interested parties, buyer feedback throughout the campaign, as well as the intended number of bidders expected on auction day for your property. Your agent and auctioneer will sit down with you (where possible) a few days prior to the auction to set the reserve at a price that you’re comfortable with, as well as being inline with buyer feedback to give you the best possible chance to sell for a great price come auction day. The auctioneer will also run through a few different scenarios that may arise on auction day and make plans to handle them accordingly, ensuring there are no surprises for you and everything runs smoothly on auction day.

What do I need to prepare to buy at auction?

When bidding at auction, it’s important to be completely aware of your obligations as a purchaser if you are successful. To bid, you will need to have unconditional finance approval to a purchase price you are willing to pay for the particular property, as well as have carried out your due diligence and gone through the contract for sale with your legal representative – not to mention you’ve reviewed any available building or pest reports.