
A real estate Auction is the process of buying and selling property by offering it to bidders conducted by a licensed Auctioneer. The property will be sold to the bidder who makes the highest offer, if it is more than the ‘reserve price’.
Before an Auction starts, the seller will usually set in writing a minimum sale price, called the ‘reserve price’. The Auctioneer is not permitted to sell the property below the reserve price and it is not revealed to prospective buyers before the Auction. The Auction is generally opened with the Auctioneer announcing the features and attributes of the property, and any specific details relating to that property. The Auctioneer then calls for, or announces, an opening bid, usually below the reserve price. The price is raised as the Auctioneer accepts more and more bids. When the reserve price has been reached or it is above, the Auctioneer will usually indicate this by saying ‘this property will sell today’ or something similar. The person who makes the final bid must then formally sign the contract, which is then signed and accepted by the Auctioneer on behalf of the seller. At this point the sales contract has been finalised.
The more common method of selling is through sale by private treaty, where prospective buyers may inspect the advertised property and decide whether or not to make an offer in writing to the seller.
Selling by Auction is an accepted real estate practice, and if you are considering buying or selling property through an Auction, or have any further questions about this method, please get in touch with our Sales Representatives today.
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