Article by Paul Kounnas
A common mistake home sellers make when listing their home for sale with an agent is that they sign the agent’s authority without fully understanding what they are committing to.
The auction authority in particular is the one that catches many home sellers out.
Did you know that when you sign an auction authority you are actually signing not only for an auction but also for a private sale? This is because the auction authority consists of two parts, an auction and a private sale.
At the time of signing the auction authority most of the focus is directed towards the auction part, the marketing campaign and auction date. The agent often without much consultation also commits the home seller to a private sale, usually for a further 60 days after the auction. At the time of listing, this section of the authority is given little attention and skimmed over quickly because there is a build-up expectation that the property will sell on the day of auction.
Even in this current strong market one in three to four properties fail to sell at auction. If your property fails to sell and you signed an authority that commits you to a further 60 days beyond the auction date, you are stuck with that agent whether you are happy with them or not.
Make sure you check all the details on the authority, particularly the number of days you are committing to the agent if they fail to sell your property on auction day.
Understand that you have the right to commit to any number of days you want in this section of the authority, even zero. If the property fails to sell at auction and you are happy with the agent you can later re-appoint them for as long as you like. But if you are not happy with their performance, you are in control and you have the choice to walk away if you want.
My advice to clients when signing to sell at auction is to not commit for an unnecessarily long time, if any. You may want to give the agent just a couple of days after the auction to finalise any possible sale with interested buyers. If the property still doesn’t sell and you have not been happy with the outcome of the auction or the way the agent has handled or marketed your property you are not stuck with them for a long period.
We recommend to all our clients a Silent Auction which is a modified version of a Nobel Prize winning concept. At a public auction you only get the highest bidder on the day. With the silent auction we obtain the highest bidders highest price, which is generally thousands of dollars more, in less time and without all the stress.