What is an Auction Reserve Price?
The auction reserve price is typically set 48 hours before the auction. The sales agent and auctioneer will meet with the vendor over zoom or face to face and talk about the campaign. The auction reserve price is set based on feedback from the buyers and a price that the vendor is prepared to sell the property.
If the sales campaign for the property has been tracking along really well and the sales agents know they have 3+ bidders, the auction reserve price will be aggressive and very realistic. On the other hand, if the campaign has been slow and they only have one bidder or no interest, the agents are more than likely to set a higher reserve price and try and pass the property to you on a live bid. If they do this, the next step is to bring you into the house and work on your emotions to buy and pay the vendors reserve price.
What do you do if a property passes in at auction?
Why would a property pass in at auction?
How to set an auction reserve price?
The sales agents set the reserve price based on two factors. The amount of interest in the property and the price the vendor wants to achieve. Often in a seller’s market reserve prices are set very realistically. However caution if you’re the only bidder, the auctioneer and sales agent will more than likely increase the reserve price higher than what the vendor will accept so they can negotiate down, not up.
How to buy before the auction date?
What is a boardroom auction?
This is when the agents have had a standout offer signed on a contract by a party who is extremely interested and committed to buying the property. What is a stand out offer? Typically this would need to be at or well above the top end of the publicly advertised price. Agents must action this as they may be seen to be underquoting if they don’t accept the offer. I could keep writing about boardroom auctions, but to be honest you need our help if you’ve found yourself during this process. There are so many tricks and intricacies that go into this process.
More Helpful advice and tips on real estate auctions