Useful Auction Documents
PHASE 1 – Marketing Phase
Many properties sell prior to Auction. In the first stage of your Auction campaign, you actively promote the property to generate interest. You can present offers at any stage of the Auction Process.
- High impact marketing campaign (8 – 10 weeks of activity condensed into 3 – 4 weeks).
- Pre-determined marketing campaign. You know exactly what you will need to do and when.
- The property gets put on a pedestal above other properties on the market. (Think bigger, better, more frequent adverts and editorial).
- Not providing a price gives you something to talk about with buyers. This is usually initiated by the buyer (how much do they want for it?).
- No price means more buyers (the property is not boxed into a particular price category). This means more buyer activity.
- Urgency – The Auction date puts a time frame on when buyers have to inspect the property and make a decision (pay by date).
- Property gets judged on its merits and not on its price.
- Sellers dictate the terms and conditions, e.g. deposit, settlement date. This can be varied by special request from qualified bidders.
- Pre-Auction is a competitive environment for two reasons: I. Some buyers fear losing the property on Auction day. ii. There may be multiple offers prior to Auction Remember when writing up offers prior to Auction, all other interested parties must be given the same opportunity to make an offer. Suggest that sellers do not counter any offer prior to Auction (otherwise they are disclosing their reserve price) and only take cash unconditional offers prior to the Auction (unless otherwise agreed by seller). All you would say to the buyer is that the offer is not enough and they need to increase their offer in order to secure the property or take their chances at the Auction. This in turn will motivate them to pay more.
- Keeps the control of the sale in the favour of the seller as negotiation is going upwards.
- Opportunity to contact buyers on a weekly basis, touching base as to how their motivation, finance, research, conditions are going.
- Timber Pest / Building Inspections and any valuations are done prior as the Auction process forces buyers to become unconditional if they want to take ownership.
- Draw up a calendar of events for the marketing campaign and pass it onto the Seller to keep you accountable.
- Must be advertised “unless sold prior” otherwise you cannot sell prior to Auction.
- Provide SELECT sales evidence that indicates the probable selling price. I recommend showing six recent sales: two well below the expected sale price, two on the money, and two above. This can be used as a hand out at the home open and the Auction day and it can also be used to send to internet enquiries (Scripts 1).
- Work with buyers on a weekly basis to get them motivated and to get their finance organized and other conditions satisfied prior to Auction (script 2).
- All buyers need to be qualified as to who they are: buyer, seller, neighbor, spectator and questioned as to what they think the property may sell for or where they see value, whether they are interested or not.
- This feedback is then provided to the seller in writing by way of a Vendor Report on a weekly basis and discussed at length to establish where the market is indicating the probable selling price to be.
- The reserve price is then based on this feedback. If seller sets a high reserve, you may need multiple reserve setting meetings using up to date sales and buyer/market feedback to get the reserve aligned with the market (use the Auctioneer to be the 3rd party or “bad cop” if needed). Usually if the Auction doesn’t sell its due to the agent not giving the seller accurate and honest feedback – “warts and all”. Remember to tell them what they need to hear not what they want to hear – “go ugly early”.
- Have a prize (a bottle of Moet) for the person who guesses the closest sale price!
- Organise a coffee van as a draw card to attract people and enourage the perception of a popular Auction.
- Make sure you send an invitation to the neighbours and your database to attend the Auction. It may also be a good idea to ask the seller to invite family and friends, and don’t forget staff from your office.
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