Auction involves a short, sharp and intensive
marketing campaign of a property without a price. This is to test the
market to see what buyers, in a competitive situation, are prepared to
pay to become the new owners of that property.
Marketing with a price limits what a keen buyer may pay. Once a listing price has been established for a property, a ceiling has been placed on what a buyer expects to pay for it. Auction, on the other hand, offers a real opportunity to get more for a property than the seller might expect.
There are three opportunities to sell a property using the auction method:
the lead-up period high profile auction marketing will highlight the
property, producing the greatest exposure during the period when
enquiries are likely to be at the highest level.
auction itself is the shortest part of the process but it is the best
opportunity to sell during competitive bidding in an open arena.
period - some people believe that if the property does not sell on the
auction day then the auction system has failed. This is not true.
Stage three provides opportunity to negotiate with those who may need to
sell another property or arrange finance before they can commit
This method of sale can be applied in any of these three ways:
tender works in a similar way to the auction system, except there is no
public auction day. Instead, tenders or offers close at a specific time
on a specific date.
Tender presents another opportunity for sellers to create a competitive situation without stating a listed price. They set the terms, conditions and the deadline, and prospective buyers have only one opportunity to put forward their most competitive offer.