Home auctions, while quite common, still have a stigma attached to them - based on inaccurate myths and misinformation. As a seller, dismissing this option can be a mistake as auction sales are, at times, the best and only opportunity to maximize your profits in a real estate transaction. The hesitations I have encountered most often come from these misguided (unnecessary) fears:
Myth #1: “I Won’t Get Market Value”
This is certainly not a risk if your property is suited for the format of an auction. For example, if you are selling a seasonal property and it shows best in June, an auction allows you to choose the day when the property will be sold, leveraging and optimizing its peak value. Similarly, when there are multiple known buyers (for example, two neighbours) interested in the property, the competitive mechanism of an auction works to the seller’s advantage.
Myth #2: “Buyers Will Assume There Is a Problem with the Property”
On the contrary, some of the homes best suited for auction are those in greatest demand, perhaps because of their unique features or their geography, and the seller will do better to not limit him or herself by setting a price.
It is advisable to perform a property inspection and make the report available to those who would like to see it. This will help you feel better; and address concerns by potential buyers.
Myth #3: “I Will Lose Control over the Sale”
In the right circumstances, auctions can actually increase the seller’s control over the situation, including selecting the exact date that the property will be sold and minimizing the time spent with the home on the market, being shown to potential buyers.
I can’t say that auction is superior to a traditional real estate listing or vice versa. It truly does come down to specific property attributes, your particular situation and your personal goals for the sale.