Auctions are not always the ideal way to sell residential property

The increased popularity of auctions as a way of selling a home has been achieved, at least partially, by obscuring some of the facts relating to this method of home marketing, says Lanice Steward, MD of Anne Porter Knight Frank.

“Those of us operating in the traditional estate agency world need to remind consumers that auctions are only one way of selling a home. An auction can be appropriate when a home has commercial potential – for example if it is on a busy road – but it can be highly inappropriate in other instances.”

Sellers considering going the auction route, said Steward, should appreciate two facts: these are that (1) many auctions do not result in a sale; and (2) in the public’s mind, an auction is often seen as a desperate, “last gasp” move and most of the potential buyers attending the auction will be looking for a bargain.

This perception is enhanced by the fact that a number of these auctioned homes are repossessed properties or from a liquidated estate.

“The chances are, therefore, that you will not achieve your sale price and will either have to accept a very low figure or live with the stigma of having failed to find a buyer at a public sale. You will also in many cases have had to pay the full costs of all related advertising.”

The big advantage of dealing with an estate agent, said Steward, is that the operation remains discreet, a fair price will be arrived at in time – and the agency carries the advertising costs.

“A good agent,” she said, “will build up a trusting, transparent relationship with the seller that results in the difficult, hard bargaining buyer coming to his (or her) senses and accepting the deal. Unfortunately this is almost impossible at (or prior to) and auction which is a make or break exercise.”

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