Your home or other property can be sold at auction or by private sale. In this article we focus on the disadvantages of selling a home by means of an auction. There are some circumstances where selling by auction could be advantageous, so also see our article on “Advantages of selling a home at auction.”
Circumstances indicate that a property auction may not be the best
- You have plenty of time to sell.
- You have a very good idea as to what your property is worth and will be satisfied to achieve that.
- The current demand for properties like yours is very shallow – there are few buyers. You don’t want to eliminate those who would be reluctant to purchase at auction.
- Few people are turning up for auctions in your area.
- Your home is very common, with a lot of others in the area just like it, several of which are also for sale.
Disadvantages of selling a home at auction
- It doesn’t suit all borrowers. They may need special conditions in the contract, but are still genuine borrowers. Others may simply be uncomfortable or put off with regard to auctions.
- Additional cost may be involved for marketing and auction expenses.
- If there is little interest shown at the auction or the bidding doesn’t get up to the reserve price, then there is a lot of pressure on to accept a lower price, and most, in not all, of the prospective buyers are aware of it.
- Should the weather be bad or marginal at the time of the auction it can have a significant impact on the results.
- Should the auction be a negative experience, the psychology has been shot to pieces and is then working against you.
- A person who might have been prepared to purchase earlier may wait until the auction just to see what the result is. In the meantime they could even find another suitable property.
Given that you are selling a home, you may have some borrowing matters to consider, either in the repayment of an existing loan and/or obtaining a home loan for another property. The friendly credit managers at State Custodians Mortgage Company are more than happy to assist. Give them a call today on 13 72 62.