Should you auction your home?

The Advantages and Disadvantages of Selling Your Home At Auction

Auctioning a property should be a careful and considered decision. Be wary of any agent who promotes it as more than one of many tools which may be appropriate.
Failed property auctions are destructive for any real estate marketing campaign. Weekly auction results, including failed auctions, are available for all to see. Potential purchaser’s view these results on popular portals such as Interested buyer’s who weren’t prepared to bid on the day drop their bids to compensate. This leads to lower property values.
Would you offer more or less when negotiating for a home that failed to sell at auction? Most people would offer less, as there is little demand for the property. Supply versus demand, the classic economic principle comes into play. It’s the real estate version of playing poker with an open hand.
When a property is unique and sought after, you’ll attract many interested parties. Showing your hand and inducing competition in this case works in your favor. But what if supply – similar properties on the market to your own – is high and demand is likely to be average? Would displaying your cards to the public be wise?
Auctions are a fantastic way to sell certain types of properties. Knowing which type of homes that is, though, is the key. In this article we break down the pros and cons of selling your home at auction. We’ll also look at which types of dwellings suit this strategy best.

Advantages Of Auctioning Your Home

  • Sale finalized on the fall of a hammer.


Disadvantages Of Auctioning A Property

  • You will only get the best buyer on the day.
  • Some buyers are not quite ready to make a bid.
  • Offers are public.
  • You attract bargain hunters looking to buy for below market price.
  • Property value will drop if your home fails to sell on the day of auction.


What Properties Are Best To Sell At Auction?

  • Properties that are in short supply or in high demand.
  • Immaculate properties that have the “WOW” factor and are always in demand.
  • Unique properties such as those with stunning architecture.
  • Properties with potential for redevelopment and development opportunity such as subdivision zoning.
Home auctions are a property marketing strategy focused on a final event. Building up to this event is crucial. A successful auction relies on having a large turnout of potential purchasers on the day. Rule of thumb is that you should only auction a piece of prime real estate with great demand.
Auctioned homes should either be unique or in high demand. Your block may allow subdivision, creating demand due to profit potential for developers. A famous architect may have designed the dwelling, limiting supply. Both situations are ideal for attracting a strong pool of bidders.

Which Properties Should Avoid Auction?

  • Properties in disrepair or may not present as well due to age or need of renovations.
  • Average homes which whilst in good condition, may not stand out from the crowd.
Remember that if a property fails to sell at auction it will have an immediate impact on market value. Whether it’s a lack of bidders or sellers’ perceived value and what a potential buyer is willing to pay. When your home fails to sell at auction, buyer’s with genuine interest will begin to offer less.
We recommend avoiding auctions altogether unless your home has recently undergone renovation. Auctions are best reserved for homes that offer buyer’s something unique.

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 Why Do Some Agencies Push Auctions?

  • Franchise and larger agents push auctions as inexperienced agents don’t need to negotiate. All they need to do is convince people to turn up on the day and hope they bid against each other.
  • Auctions are a controlled marketing event for the agency. Instead of spending money on advertising, their sellers do it for them. Many agencies do this even if auction is risky or unsuitable for your type of property.



Homeowners are often convinced to sell at auction, regardless of circumstances. Remember that there are many methods of selling property. Each home deserves a personalized strategy. Homeowners are often pursuaded to auction by agencies with ulterior motives. Auctions also double as a marketing event for their agency, with sellers footing the bill.
Canberra’s auction failure rate is between 30 and 50%. Many auctions result in sales below market price. You must consider if it’s worth selling under the fall of the hammer. Real estate in high demand tends to sell for more at auctions, but these homes are rare. If time is your main concern and price isn’t so important, you may also see a quicker sale.
Home-owning families are usually aiming for the best price though. That’s why we reserve auctions for home’s that are quite unique. For most homeowner’s, a different sales strategy will usually result in better returns.

If you’re considering selling your property, why not speak to one of our senior agents? Our agency principal, Peter Tolhurst, has over 25 years experience and would be happy to perform a free, no obligation market appraisal at a time that suits you.

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