An Auction Agreement is actually a method of selling an Exclusive Agreement. When you place a price on a property for sale it is called a Private Treaty however when you place no price on the home and allow buyers to bid on a predetermined day it is called an Auction.
If you submit your property for sale by Auction this means that prospective purchasers will bid against one another at a date and time suitable to you.
You can set a reserve price which is the minimum you will accept and once bidding has passed that level you know you have a sale as it will be unconditional and a predetermined deposit must be paid on the day.
Auctions certainly have their place. They can work fantastically well with unusual, highly desirable homes and they are perfect for rising markets where placing any value on a home can be difficult.
Some agents abuse the auction system and use it when an owner has indicated they want to much for their home. They believe signing an auction agreement with no price and running through an auction period will “educate” the owner to what their real value is. This is an expensive way to appreciate real value of your home and a practice that Nerang First National does not condone.
When used correctly with realistic expectations then Auctions can be a fanstastic decision. Watch this short video and discuss with your agent whether your home is suitable for an auction.