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Tips to Make Auction Day
a Success
Auctions don’t just happen. A lot of hard work and money goes into presenting a home for auction and achieving a great result on the day.
You will have
- Put a lot of work into presenting your home for potential buyers
- Set a date
- Researched and set a reserve price,
- Run a marketing program
- Held open houses
- Liaised with potential buyers
- Provided contracts
- And generally put a lot of time, effort and money into getting ready for the big day.
After all this work, you want auction day to go as well as possible with hopefully a great sale result. Here is some helpful advice for auction day itself.
Note: Each state has its own set of regulations around how auctions are run. It is important for you to be aware of your state’s individual rules and regulations.
Final Public Showing
Just before the auction there will normally be a final public showing. One last chance for potential buyers to have a look around. At this showing the agent will display legal documentation regarding the property and the auction.
In most states, potential buyers must register before the auction starts to be able to receive a bidder’s number.
There are substantial fines for any illegal auction conduct. There are many laws surrounding the auction process. It is illegal to in any way intentionally disrupt an auction, disrupt another bidder, make a false bid or bid as a non-genuine buyer.
When the actual auction starts – Your auctioneer will invite registered bidders to start with an opening bid. The auctioneer may suggest where to start bidding, although it is entirely up to the bidders what bid they would like to submit.
Most properties have a reserve price that needs to be reached for the house to be sold. Once this reserve price has been reached, the property is then considered to be “on the market” and is sold to the highest bidder.
Auctions normally require the highest bidder to immediately supply a 10% deposit, with the balance due on settlement. There is also normally no cooling off period when a property is sold by auction.
If the bidding does not reach the reserve price that you have set, it will then be “passed in”. The highest bidder then has the opportunity to negotiate with you to see if you can come to a mutually agreeable deal. Many times a property that gets passed in, will sell by negotiation on the day or within days after the auction. (Please see our separate post regarding what to do if your house is passed in at auction).
What not to do
- Don’t get too emotional about the process or too stressed on the day
- Don’t Interfere with interested buyers
- Don’t arrange for your friends to bid to get the price up
- Don’t disclose or talk about your reserve price to anyone
- Don’t be unrealistic with your reserve price
- Don’t fold under pressure. Set your boundaries and limits for the lowest offer you’ll accept