Yes! You absolutely can set a minimum price for your property. Be careful to be realistic about the value of your property, and price strategically. Whether you reserve a minimum price or not depends on the kind of auction being held. You should know about the different kinds of auctions, and the advantages and disadvantages of each.
There are 3 common forms a real estate auction takes. A real estate auction could have no reserve at all, a published minimum, or be subject to confirmation without a published minimum.
No Reserve
The first auction is the simplest and pretty well self explanatory. The bidding begins at $1 and goes from there. No matter what the final price, the seller has entered into a binding agreement and must accept it.
Minimum Bid
This is the form most Gordon's auctions take, and we have had a lot of success with it. The seller specifies a minimum bid (also called a reserve) and this becomes the starting point for bidding. Typically after valuing the property, we advise that the reserve be set lower than that. The seller is then bound to honour the sale at whatever the final price is.
Subject to Confirmation
This is an auction without a published minimum. The seller can always reject the highest bid and elect not to sell. The marketplace does not like this kind of auction because it is not transparent, and can be a waste of everyone's time. The first question every buyer asks is “What is the reserve?” If the seller does not have a good answer, a potential buyer is not going to feel confident going into that auction.
Whether you choose an auction to sell your property, or to list your property the normal way depends on your circumstances and the conditions of the market. If you believe your property is worth a specific dollar amount and don’t mind waiting, you can list for the price you want and wait. For many people, selling right now for fair market value is a better option.
