The word 'auction' seems to be a negative one ... Buyers are averse to them and sellers are scared of them. But there are so many positives to this strategy.
Here are my thoughts about auctions - why they produce the best results and why you shouldn't be scared of them:
1. The campaign doesn't drag on. Auctions allow you, as the seller, to condense your campaign and attract only the most serious buyers out there. Most auction campaigns are 4-5 weeks long so you are able to invest in marketing for that period of time and get the most buyers through in order to know where the market sits and make the best decision possible.
2. The campaign produces results - even if the property doesn't sell under the hammer. Throughout the campaign, the agent gathers offers, price feedback and buyers prepare to bid. Even if the property doesn't sell at auction, it doesn't meant the opportunity is lost - it's the opposite. All of the momentum and interest brings you that much closer to a) knowing where the market sits on price and b) making the most educated decision as a seller. You will be in a better position to make a decision and buyers will be more prepared to pull the trigger. No matter what the outcome is on action day, it's a positive towards the best result.
3. Buyers don't have to wait until the auction day. There is always an opportunity to submit an offer prior to auction. Ultimately, the auction campaign is no different from private treaty in the weeks leading up to 'the day' as buyers are still able to secure the property if they want it. If you love a property, go for it! There's nothing stopping you from giving it a shot prior to auction.
4. The campaign brings more favourable terms. It is understood that if you buy at auction, you buy unconditional with a healthy deposit and meet the seller's terms. The campaign allows serious buyers to conduct building inspections and do their due diligence bringing them steps closer to a more favourable offer. Your terms are also communicated to all buyers who enquire, so if you need a 30 day settlement and you'd prefer a healthier deposit, you're more likely to get that in an auction scenario. Once the property sells, both the buyers and sellers can then make your plans and move on... and celebrate!
5. Buyers can bid in a transparent environment. Buyers benefit from bidding on a property openly knowing their competition and competing bids so there is transparency and honesty. They are able to make their best effort to secure the home while knowing what other bids are coming in. This open forum allows for no secrets, no issues with 'what the seller will accept' or 'what the agents says they should bid'; it's completely up to them and the market to determine where the bidding ends. So, there's no need to be scared of auctions - you can just bid freely and know you gave it a shot! Why not?
6. You can bid virtually! We now stream auctions live online and bids can be placed in person or from the comfort of your own home on the online platform. If you can't make the auction in person, no worries! You can bid from anywhere on your smartphone, tablet or computer.
The moral of the story is that auctions shouldn't be scary. They are a sales strategy that provides the sellers with clarity and the buyers with the opportunity to get serious and put their best foot forward to secure the property in a timely manner. And there is always an opportunity to secure the property prior to auction.
There's also the misconception that auctions are better in a strong market, which is not the case. No matter the market conditions, auctions will always be the best approach for achieving the best results. Here is an article by @therealestateconversation about why auctions are just as valuable in a slower market:
Happy Buying & Selling!