Auctions: On-site Versus In-room
If you’re selling your home via auction, you normally have two choices, on-site or in-room.
In-room auctions can traditionally benefit property sellers with small townhouses or apartments where space for a crowd of bidders is limited and you’re not at the mercy of weather conditions. However, on-site auctions have a range of benefits that can often land you with a better price for your property.
Reserve price versus higher price
The first major benefit of auctioning your property on-site is that the bidders are standing right in front of it. Purchasing a new home can often be an emotional decision, and there is more chance buyers will get caught up in the moment and pay above the reserve price, as opposed to being in-room staring at a screen.
In-room auctions are easier for the agent to process and therefore more time efficient. They are often conducted by auctioneers that have not met with you, the seller. Their job is to get your property to the reserve price and sell. There’s isn’t the same level of investment that an on-site auctioneer would have in selling your property. An onsite auctioneer can often be negotiating on your behalf, as opposed to an in-room auctioneer who will not leave the podium positioned at the front of the room.
An on-site auctioneer is working for you. You’ve often had the time to get to know them, and they’ve had a chance to get to know your needs and your property. They know how to talk up its best features and benefits, and reinforce the local area’s attributes at the auction. You never know, the highest bidder on the floor might have an extra $5,000, $10,000 or $20,000 in their budget. An on-site auctioneer knows how to use an emotionally charged and excited audience to raise the bids or negotiate on the floor.
Sole focus versus buried amongst multiple properties
In-room auctions are conducted in allotments of approximately four to eight other properties, sometimes more. If your property is buried in the middle of the time slot, it’s likely to get lost among larger or more impressive properties. Bidders intending to participate in your property’s auction might be swayed to bid for another, instead. Bidders also don’t have the opportunity to walk around and take in the physical features of the property.
In-room auctions often only present a promo of your property that lasts for less than sixty seconds; nowhere near enough time for bidders to be reminded of its top features. An upside to in-room auctions is that there should be a crowd for your property with a number of properties on offer. However, this may not be the case should your property be the last lot auctioned. At an on-site auction, the property in question is the sole focus for all bidders, and it is generally open for viewing thirty minutes prior to the auction commencing. Neighbours will often attend an on-site auction out of curiosity which will help make up the crowd as opposed to in-room, where neighbours rarely attend.
Intimidation versus confidence
At an on-site auction, bidders are taken care of. When selling your property, you want bidders to be confident and feel comfortable in a situation where there are many onlookers. A professional auctioneer can often meet the registered bidders and if time is permitting, will explain to them how the process works before the auction commences so that everyone is on the same page and comfortable with the process. You don’t want a potential buyer getting stage fright and being unable to raise the bid.
At an in-room auction, your potential buyers aren’t personally looked after by an agent and generally will not meet the auctioneer. Buyers aren’t always looked after in a way that will inspire confidence to bid. Experienced bidders will often dominate, and sometimes this isn’t the best case scenario. A potential buyer who is emotionally invested in your property may provide a better offer for a home that they can see themselves raising a family in.
Complete stranger versus trusted auctioneer
There is a higher level of negotiation involved with on-site auctions. Having a trusted auctioneer on your side is a powerful thing. They know your requirements, your property, and what you’re aiming for. When they reach the highest bid, they can discuss this with you, and ensure that you’re happy with the final result. An in-room auctioneer will not leave the podium and discuss the final sale. Once it is done, they simply move on to the next property.
Grant Penrose has been working in the real estate industry for over twenty-seven years and has developed a portfolio that shows it. As a property investor, landlord, real estate agent and auctioneer, he’s a true expert with a passion for acquiring the best possible price for his clients.
Even if you’re not ready to sell yet, give Grant a call and mention this article.