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The big sale day has finally arrived. If things go well your house may have that SOLD sign out the front by sunset.
While most people are only too happy to tell you what they think your home is worth and how you should go about selling it, there is still such a thing as auction etiquette.
We asked three industry experts to tell us what vendors should not do on auction day. Here’s what they shared.
1. Don’t meddle with genuine bidders
President of the Real Estate Institute of Australia (REIA), Peter Bushby, says homeowners must never interfere with genuine buyers. It undermines the auction’s integrity and can scare away prospective buyers from making real bids.
When you interfere, you can scare away real buyers.
“Don’t arrange for your friends to bid to get the price up, or even bid yourself. This is wrong,” Bushby says.
“Most auctions will have as a condition that any vendor bids will be made by the auctioneer, and the limit is two.”
2. Don’t tell your mates your ‘sell price’
Although it may be tempting, you should resist disclosing the price that the property will be put on the market for on the day of auction.
“Don’t openly reveal your expectations,” says Bushby, “and certainly do not reveal the reserve price even to family and friends ahead of the auction, as rumours can spread quickly,” he states emphatically.
Inadvertantly or otherwise, you also should avoid talking up the property price by revealing your own expectations as to what it will sell for. According to the REIV President, this too has the potential to scare away buyers, “particularly if your expectation sits above what may be paid.”
“While it’s good to be positive, it’s even more important to be a realist,” says Carolyn Cass, Property Sales Agent at Curran Property, Sydney.
Try to be realistic about your property’s selling potential and maintain a level head.
“Although vendors don’t like to hear this, the only thing that generally stops a property from selling is its price,” Cass says.
Bushby agrees, and says vendors should wake up on auction day guided only by the pre-auction buying market.
“The lead up to auction usually sets indications on the pricing, so listen to the feedback you get through your agent when finalising your reserve price ahead of the auction,” says Bushby.
Dang, the auction has been a fizzer. But that doesn’t mean the game is over, stresses Cass, who has attended over a hundred auctions in her career.
“The game is not over, you are simply entering the next stage of the auction campaign,” she says.
“There’s a common misconception that if you fail to sell under the hammer it’s a disaster. But we find many properties that don’t sell at auction end up going for a top result over the following couple of weeks,” says Cass.
Properties that don’t sell at auction often go for a high price towards the end of the campaign.
“I like to tell my clients that the best approach to take on auction day is hope for the best, but prepare for the worst.”
Craig Knudsen, Principal Advisor at Vendor Marketing, says many properties are passed in at auction to the highest bidder and this person has the first right to negotiate.
So there’s no need to announce the property is on the market while the auction is still live unless, of course, it really has reached its reserve price and the bidding is hot.
“The highest bidder receives first right to negotiate to meet the vendor’s reserve price, or best case scenario price, or even the high ball price that’s set in this circumstances,” Knudsen explains.
Most negotiations meet at halfway price points.
Most negotiations meet at halfway price points. So if, for example, a property passes in at $1.1 million and the vendor’s realistic price expectation is $1.15 million, an agent should specify the vendor’s asking price is $1.2 million, Knudsen says.
“The worse thing a vendor can do on auction day is to be conditioned by their agent to accept an unsatisfactory offer after an unsuccessful campaign.
“Most vendors do not realise they hold the trump card. The most important signature on the sale contract is their own, not the purchaser’s as a sale is only complete once the vendor has signed.”