Your house carries a lot of memories related to your family. The fun times, the parties, the get togethers, the sad times,etc. But when you decide to move to another locality, you cannot keep the house empty and let it filled with dust and dirt around. You would rather choose to sell it, or auction it to a new family that can make their memories for the years to come.
But if you are new to selling the house and began your research about it, then know which is better – auction or sale. Also,many stumbles on the fact while researching that auctioning the house is better. And now you do not know which is good for you? This is the right blog for you to clear the confusion. Read on.
Auction-This process is when a group of prospective buyer comes together to bid on the property. The highest bidder gets the house but needs to pay on a pre-set date and time.
How does Auction work?
Step-1 your house is advertised with the date and time of auction.
Step-2 The vendor hires an auctioneer, or you can choose your choice of real estate agency.
Step-3 The interested buyers bid against each other till one buyer is left, who wins.
Step-4 The auction provides sellers with a reserve price as protection. Meaning, if the property doesn’t meet the pre-agreed level, the property doesn’t get sold. Later, as there isn’t any ceiling price, the opportunity to achieve a price well above your expectations is high, especially when there’s a huge demand.
Step-5 The current highest bidder can refuse the offers if the house doesn’t reach the vendor’s reserve price.
Benefits of Auction
- In an auction, the interested buyers cannot determine the true market value when they aren’t aware of your sale price.
- With you as a vendor, the prospective buyers bid with your terms and conditions.
- The reserve price set by you and the real estate agent is determined by the information collated during the inspection of the house.
- You can control the budget of the marketing plan to advertise your house for auction.
- In case your property doesn’t get sold during the auction, you get to have direct contact with the best buyer that can lead to further discussions.
- The property is exclusively held by a real estate photography agent or an auction house for a fixed period. The marketing is usually intense during this period.
- It is possible for an early sale to occur, like a day before the auction begins. This usually happens when the buyer is forced to make an offer to buy the house when he/she knows about the fierce competition.
- If your house has unique features, they often attract more competition.
- There could come a point when the auction is just between two competitors. During this time, it’s natural that both the competitors have to bid more than what they expected. This can result in large profits.
Limitations of Auction
- Bidding a tricky process. It’s good if it’s a quick bidding process. Otherwise, it may raise questions or give a wrong impression about the true value of your house.
- The intensity of the bidding is not liked by everyone. It may lead to the buyer backing out of bidding for the house.
- Marketing and advertising for auction of the house are sometimes very expensive.
- The buyers in a few states may have to register to participate in the auction. This is sometimes a no-no for the buyers.
Sale how is it different from an auction?
The sale of a house is the most traditional way to sell the house with a fixed price in mind. The vendor will make their sale price expectations clear. The price of the property is usually fixed after consulting a real estate agent. The seller of the house must ensure that the price is set or is the most accurate to the current market value. And so on, the property can be advertised with a perfect marketing strategy.
Benefits of Sale
- Once the house is advertised for sale with its fixed price, it attracts the homebuyers looking for your kind of house with the same price bracket.
- If you do not have a set deadline to sell your property, you have the opportunity to attract good purchasers.
- Advertising the price of the property is an advantage when the buyers who are intimidated by the auction have the opportunity to pitch in for your price point.
- It’s easier to negotiate during the private sale where specific details of the property are revealed during the visit with the owner.
Limitations of Sale
- Private sales are subjected to a cooling-off period leading to the buyer changing their mind after signing the contract.
- This usually takes more time than an auction. You have to be patient enough to attract a good buyer. But sometimes, the property just sits for a long period and does not go on sale.
- You may have to negotiate down the sale price, unlike the auctions.
So, these pointers for auction and sale of the house may help you decide what you need to do next. Even though both the processes seem to be a little hectic, you will surely find solace with whatever you choose.
Hi, I’m Eleena Wills. Being a writer and blogger, I strive to provide informative and valuable articles to people. With quality, constructive, and well-researched articles, one can make informed choices. I cover a wide range of topics, from home improvement to hair styling and automotive.