How to Sell Property at Auction – A Guide for Success
And, if you are considering this potentially lucrative sales avenue for your property, here’s some insight into the process of selling property at a real estate auction in Malta.
The Benefits of a Property Auction
The rise in popularity of real estate auctions has resulted in added benefits for the sellers of listed properties. The increased demand, for example, has a knock-on effect on property prices, with more bidders meaning higher selling prices, sometimes even beyond market value.
Meanwhile, there is the assurance to the seller that all purchases at the auction are final, legal and binding. As the winning bidder is obliged to pay an immediate 10% deposit bankers draft before bidding begins – the seller avoids the customary uncertainty and disappointments associated with property sales made through more conventional methods.
Perhaps the most desirable benefit of real estate auction, however, remains the availability of a speedy and uncomplicated sale of any property, which enables other areas of life to proceed hassle-free and unhindered by waiting for a sale to be completed.
Selecting the Right Property to Sell at Auction
Although a real estate auction can include property of all kinds, from residential to commercial and garages to vacant land, there are some types of property that are more suitable to be listed at an auction than others.
It is worth considering whether there are any unique features to the property in question that might make it of interest to a specific audience within the current buyer’s market. For example, if the property is derelict or in need of repair, it may be of appeal to purchasers in pursuit of a project for renovation.
If a property is of such an individual character, meanwhile, that an estate agent has difficulties suggesting a sale price, an auction can assist with this in that bidders will pay the price they feel the property is worth.
Likewise, any property that has hitherto been difficult to sell, for whatever reason, could finally be sold at an auction with no chance of the sale falling through.
Choosing an Auctioneer
Following the decision to sell a property at auction, the next step is to select an appropriate auctioneer. There are only a couple available auctioneers in Malta, and each might work only with a specific type of property or region, or solely specialize in auctions, whilst others may have auctioneering divisions connected to regular estate agents.
When selecting the auctioneer, a seller needs to consider these factors in relation to their chosen property, as well as the auctioneer’s costs, reputation, marketing potential and style, and any additional costs involved, such as advertising or legal fees.
Agreeing the Reserve Property Price
The decision on the property’s reserve price is one of the most important to be made in advance of a real estate auction. This minimum acceptable price for the property must be set at the correct level, as, once it is reached, the property is then considered sold, unless it increases even further from there.
The auctioneer can assist with setting this reserve price, as well as agreeing on what the property’s guide price should be. This guide price may not necessarily be the same as the reserve price, and should be temptingly low enough to entice potential buyers into bidding at the auction, but not be so low as to be unrealistic and put buyers off as the price increases rapidly during bidding.
Getting the Property Ready for Auction
When a property is listed in an auction, it must be catalogued and made ready for viewing by the general public or, more specifically, any interested bidders. Viewing arrangements should then be made accordingly, and the property should be made to look as attractive as possible to appeal to would-be buyers. A real estate agent will hire a professional photographer and a stager to get the best pictures possible for better traction via social media and web browsers. In instances when the property maybe on plan or in an ill state of repair – 3D renderings are often created to provide vision of what the property could look like if it was purchased.
Offers Received Before Auction
It is not uncommon to receive an offer on a property prior to it being put to auction. This is a perfectly legal practice, and it falls solely to the vendor as to whether he/she chooses to accept it, or to otherwise proceed with the auction.
Both options have risks, but may pay off: if a buyer wanted to purchase badly enough, they would presumably still be inclined to attend the auction and bid that offer price there, where there is a chance that the final price could exceed that. However, there is always the possibility that bidding may stop before this initial offer price is achieved.
When at last the property does go to auction, the seller is not obliged to attend, but might find enjoyment in the adrenalin rush of seeing the purchase price of the property gradually – or rapidly – rising.
Being present at the auction also has the added bonus of being on hand on the rare occasion that the property should fail to meet its reserve price. In this case, it is still possible to do a deal with a willing buyer for an agreed lower price if selling the property quickly is a priority.
RE/MAX Auctions Malta has over 350 + Sales Associates working towards selling your property and have a great track record with over 80% of the auction properties being sold within the first ninety days. If you would like to explore this way of selling your home, Contact Jeremy Borg Grech on tel:+356 9952 4111, or visit the Malta Property Auction Website.
Post by Jeff Buttigieg
Jeff Buttigieg is Co-Founder and COO of RE/MAX Malta and JK Properties Ltd. He overseas the marketing, PR, IT and business development of the company. He has a vast experience in real estate having been an associate and manager himself for several years.