There are two popular ways to sell a home - an asking price agreed on by you and the real estate agent, or an auction.
Now you might not be sold on the auction process, but in the right suburbs and market conditions it can attract a higher price. If you do decide to go that way, here’s what to expect on auction day.
Ask away before it gets underway.
Before the auction, talk to your agent and ask questions, do your research, and be clear on your reserve price and the auction rules.
Rules are made to be spoken.
As well as displaying documentation about your property at least 30 minutes before the auction, the auctioneer will detail the rules of engagement before bidding starts. Auction laws vary in all Australian states so have a chat about the legal requirements with your agent.
Spring into auction.
The auctioneer will then ask for opening bids. At the start of the auction, these will usually increase in $5,000 increments, although smaller amounts - like $1,000 - may be accepted at the auctioneer’s discretion.
The reserve price is the minimum price you’re willing to accept for the property, and will usually be determined by you and the real estate agent prior to auction day. Once the reserve price is reached, your property will be declared ‘on the market’.
If reserve isn't reached.
The auctioneer may ask you if you’re willing to accept a lower price than the reserve price. If not, the home will be ‘passed in’. The highest bidder will be encouraged to negotiate a price with you and the agent that everyone’s happy with.
Going once, going twice.
If the reserve price has been reached, the auctioneer will invite further bids, often in smaller increments as the bidding slows. Last minute bids will be encouraged by calling: ‘going once, going twice, going three times..’
If no further bids are received, the auctioneer will declare the property sold. Unlike homes for sale, there is no ‘cooling off’ period in which the buyer can change their mind after the fall of the hammer in an auction.
10% now, 90% later.
The winning bidder will be required to pay a deposit straight after the auction, which is usually 10% of the purchase price. The balance is paid on settlement, typically in 30, 60 or 90 days. Once this happens and the contract has been signed by you and the buyer, your home will be officially considered sold.