REMEMBER END GOAL

Chasing a successful sale of your property for the best price and terms

A NORMAL seller (as opposed to a third-party seller such as a bank or administrator) will choose an auction strategy for one of two reasons – they want the certainty of an unconditional contract (and to have buyers aware of that fact going in); or they are looking to maximise a sale price through transparent competition.

With a decision made for the latter, the typical auction campaign will last four weeks from listing through to the auction day, with that time provided so that firstly, buyers have an opportunity to identify the home, and secondly, that they can get themselves in a position to bid unconditionally on auction day. That time is also important for the seller. It gives them the chance to get real feedback on pricing so that when the time comes to set a reserve (the minimum amount the auctioneer is permitted to sell the property for), it can be reflective of the market. The question is what happens when an offer, and I’m talking about a really good offer, comes early?

Simply put, it’s easy to forget that the auction isn’t the actual end goal when the focus is on the auction, and the process, and the auction date. The end goal is the successful sale of the property for the best price, and terms, whatever the method. So when assessing an offer in front of a seller against what could happen at auction, I always ask one question – “if this was auction day, and the bidding got to this point, and you knew that you were only a ‘yes’ away from having your home sold, would you be saying yes?”

If you’re convinced it’s a “yes” then it all comes down to the conditions. An auction sale is as binding as it comes, short of being handed a briefcase full of money on signing. Ideally, your offer is on similar terms, letting you again have that same certainty. If there are conditions attached, however, you need to weigh up the risks of what happens if those conditions aren’t met and the sale falls through – will you have lost the momentum of the auction? And will your competing buyers have bought elsewhere?

Sometimes it might be worth that risk – your buyer might be able to offer more with the benefit of a finance clause than they could otherwise, or a good building and pest report might have given them confidence to bid without a contingency budget. Sometimes it’s worth more just to get a good night’s sleep, knowing your result that little bit sooner.