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A sale by auction is very fast-paced and intense, a deliberately created high stress environment to encourage competition from buyers in order to get the highest possible sale price. Through auction the property is sold to the highest bidder once the seller’s reserve price has been realised.
The marketing campaign for an auction is kept short and focused, often promoting the apartment through a multi-media marketing campaign, ranging from two to four weeks. Auction sales are unconditional. This means that a buyer cannot bid on a property with conditions, e.g. ‘conditional on finance’. Once the autioneer’s gavel falls, the highest bidder purchases the property unconditionally.
Sellers also reserve the right to consider offers which come in before the auction takes place. In this case it is critical your agent has in place a robust, clear process to manage pre-auction interest.
The advantages of an auction are that buyers know that the vendor is committed to sell, and removing the price allows potential buyers to perceive value, uninfluenced by a pre-determined price guide. Also, the buyers bid with terms and conditions set by you, and you are in control of the reserve price. Similarly, if you have deadlines, an auction is the fastest way to achieve a result. The competitive nature of bidding often encourages buyers to bid above their original intentions, resulting in a higher sale price for you.
Finally, intense marketing elevates your property over others in the market. In other words, auction provides a point of difference for you. If your apartment doesn’t sell under the hammer the property is often sold soon after to an auction participant. If not, conditional interest from those unable to bid on the day can be engaged.