There’s a certain satisfaction that comes from selling your home. One way to do it is to auction your house. It’s a fast way to make a sale in today’s slow market.
If you note that nearly 11 percent of homes sold at auction go for more than the original asking price, many sellers become much more interested in the concept. Here are the seven steps to the home auctioning process.
1. Know how much your home is worth
In preparing your home for sale at auction, it helps to know how much it’s worth. Not obtaining an appraisal can make the difference between selling and not selling your home.
Overpricing it means buyers will shy away. Pricing it too low can also scare them away, making them wonder if there is a hidden problem with the home. It also means less profit for you.
2. Prep your home for sale
Another task is home prep. You’re going to want to ensure that your home is in tip-top shape for the market, even if you’re selling at auction. This means fixing any small issues and giving dull colors a fresh coat of paint. It’s a small, inexpensive fix that doesn’t take much time.
3. Find a specialty auctioneer
You must locate an auctioneer who knows what it takes to sell a home. An auctioneer whose only experience is with antiques and jewelry is not a smart choice when it comes to selling your home.
Narrow your choice down to a person who specializes in auctioning your type of house. You don’t want someone who sells mobile homes working with your mansion.
4. Discuss fees
It’s important for you to know how the auctioneer will be paid from the sale. Some auctioneers charge a commission based on the sales price of the home; that comes out of your profit. Others charge a buyer’s premium, and add roughly 10 percent of the sales price onto the buyer’s balance.
5. Choose the right auction
There are two kinds of auctions; absolute and reserve. In an absolute auction, the highest bidder gets your home, no matter what, even if the bid price is well below what you expected. In a reserve auction, the highest bidder cannot purchase your home if the bid does not meet a minimum reserve.
6. Ask about buyer qualifications
Like any good home sale, your buyers need to be qualified to purchase your home. This means you must ask your auctioneer whether or not he or she requires potential buyers to document their finances with a letter from their bank or lender.
Some may ask that bidders present a certified check for at least 10 percent of the sales price your home is expected to go for as a show of good faith.
7. Discuss bids
There are several ways to conduct the auction. One is to have buyers stand right in your yard and bid. Others include gathering a group of people at an off-site location and having the buyers bid; another is to accept bids in private for an extended period of time until the offer expires and the highest bidder wins.
Find out more information
Before you make the decision to auction your home using any of these methods, find out all you can about the process, particularly as it applies to the auctioneer. Knowing what to expect can help you choose the best auctioneer for your home sale.
Auctions might not be the typical way to sell a home, but if you can get what you want, or even more, there’s nothing wrong with choosing that approach. It’s faster, less stressful, and it just might give you what you want.