Setting The Auction Reserve Price

Auction picAuctions can be stressful and emotionally-charged events, so when the time comes to setting the reserve, it can be really overwhelming unless you have the right knowledge and advice on hand. It is an important decision that is best done with logic, so try leaving your emotions aside for a moment and trusting facts in order to ensure you get it right. This way you won’t be regretting your decision for potentially many years to come. To assist, we have compiled a few tips to keep in mind when setting the reserve.

Take the time to go over your comparable sales. Only focus on the sold prices as quite often properties are advertised for sale at a much higher price than the end result.

Study the market feedback from buyers. This will be a good indication of whether your desired price is in the ball park or not.

Chat to your agent regularly throughout the campaign. Make sure all parties involved in the decision making process do this. Failure to do so is very detrimental to the sale.

Take advice from professionals and avoid listening to outsiders, including family members and neighbours who often give emotionally charged advice rather than information based on facts. Also be wary of advice from competing real estate agents who may be more interested in taking over the sale as opposed to looking out for your best interests.

Make sure the price you set is at an acceptable walk-away price which leaves you in a position to be able to achieve your real estate goals. Make sure you have done your sums to ensure you are clear on this. If you intend to buy a new property, thoroughly research the market you are moving to and establish what the price of your new home is likely to be. If you’d like help with this phone us on 0424 006 855.

ONCE YOU HAVE DECIDED ON YOUR RESERVE PRICE, HERE ARE A FEW IMPORTANT THINGS TO KEEP IN MIND:

If bidding starts to slow at Auction and it is just shy of your reserve, you do have the option to lower your reserve to the highest bid. If you do, the Auctioneer will be able to announce that the property will be sold. This can often trigger an under bidder to re-enter the ball game and make another bid. Auctions can often enjoy a great second wind once the buyers realise the reserve has been reached. Be careful to consider your position however as there is no guarantee of this happening.

If you decide not to lower your reserve price, your agent will generally ask the highest bidder to raise their offer. If they do and the offer is at or above the reserve price, then it will be sold under the hammer.

If the owners and bidders do not meet each other on price, then the property will be passed in. The highest bidder will have the first right to negotiate on the property after the Auction. Quite often, this is the time when auction properties sell so if it doesn’t go under the hammer, don’t despair. Auction conditions apply till 12pm midnight so it may well still sell post auction.

At the end of the day, if the auction campaign has been done properly and the property has been priced at the right level, there is normally a minimal gap between the highest bid and the reserve. It is vital for an auction campaign to be marketed correctly and for an experienced agent an auctioneer to manage it. If you are considering an auction for your property, phone us today on 0424 006 855 for honest and accurate advice to help you achieve a premium result for your property.

About Bernadette Cullen

Bernadette Cullen is the Campaign Specialist at Northern Beaches Property Specialists. With extensive experience in design, real estate marketing and client service, Bernadette brings to the team outstanding communication and excellent people skills. A seasoned property expert that loves her chosen profession and believes there is no better place than the Northern Beaches to live, work and raise her young family.

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