Auction vs Asking Price: What You Need to Know

You are thinking about selling your investment property in Perth. You have heard about auctions and it looks like a great way to sell your property. On the surface, it looks great; there are people bidding against each other for your property and an auctioneer who is an expert at driving the price up.

This looks like a great way to get the best price for your house–and get it quickly without months and months of waiting in limbo and keeping your house looking good enough to show. But is it really any better than Free Sale Appraisal?

Auctions: Do They Always Work?

Auctions often have a downside. Most of the people at auctions have heard that they can get great bargains and quit bidding once the price remotely approaches your secret reserve price. Many auctions are failures because the reserve price isn’t met.

On the other hand, you can have one of “those” auctions where motivated bidders drive the price of your house higher than you dreamed it would go. Auctions are all about creating urgency and competition, thus providing you with more leverage to command a higher selling price. But do you really need an auction to get people bidding against each other for your house?

What is a Private Treaty?

Many properties are sold by private treaty in which an agent negotiates a price with competing buyers. As in an auction, the seller establishes a minimum price; as in an auction, there are often many buyers competing to buy the property. Unlike in an auction, though, bidders have no idea how many people they are bidding against or how much other bidders are willing to pay. This creates even more urgency and forces bidders to offer a fair price in fear of being outdone by another bidder.

What works best?

The best technique depends on the property involved. Auctions are generally for unique properties that are difficult to price. Private treaty is a much better route for most people.