Cost associated with Auction

[cd83]

Hey,
Having recently relocated from Perth to Adelaide and am slowly getting use to the amount of properties sold by auction (don't think I ever attended one in Perth). A couple of questions:

1) Just wondering if anyone can tell me what the additional costs associated with selling by Auction are? Is it just an additional fee for the auctioneer?

2) What is peoples opinion on why they are so much more popular over here than over west?

Cheers,

Colin

 

[Brady]

My opinion is that auctions weren't always that popular here, but it's starting to happen a lot more. Usually happens in the trendy areas, but now auctions are more frequent especially with any property that has development potential.

Sometimes it the agent not knowing what its worth, property being unique, development potential, trying to get more out of the vendor. Hey could also be an impact from all the media, shows like the block etc.

Would love to see some data on how many auctions have had happened same time last year, compared to now.

 

[vaughan]

Hey,
Having recently relocated from Perth to Adelaide and am slowly getting use to the amount of properties sold by auction (don't think I ever attended one in Perth). A couple of questions:

1) Just wondering if anyone can tell me what the additional costs associated with selling by Auction are? Is it just an additional fee for the auctioneer?

2) What is peoples opinion on why they are so much more popular over here than over west?

Cheers,

Colin

In NSW there are no auctioneer fees paid by the buyer, it's part of the agent's commission paid by the seller.

The only costs that you have are the pest and building inspections that you get done before auction day. Auction sales are unconditional, so you cannot win at auction and then try to get out of the purchase if you find problems.

 

[mikezen]

In NSW there are no auctioneer fees paid by the buyer, it's part of the agent's commission paid by the seller.

The only costs that you have are the pest and building inspections that you get done before auction day. Auction sales are unconditional, so you cannot win at auction and then try to get out of the purchase if you find problems.

What happens if finance falls through? Do you just lose your deposit?

 

[cd83]

In NSW there are no auctioneer fees paid by the buyer, it's part of the agent's commission paid by the seller.

The only costs that you have are the pest and building inspections that you get done before auction day. Auction sales are unconditional, so you cannot win at auction and then try to get out of the purchase if you find problems.

Cheers Vaughan, am interested more in costs to the vendor. Does an agent charge more than the standard commission if a seller wants to sell by auction rather than Private treaty?

 

[Scott No Mates]

Commission shouldn't change - there is often a larger marketing budget (newspaper, letterbox, web etc)

 

[Big Will]

If the REA doesn't have an inhouse auctioneer you will have to pay additional for this sometimes. I know with some of the franchises they have an auctioneer that works in a patch that needs to be paid (about $200 I think)

 

[cd83]

Thanks for the replies

 

[vaughan]

What happens if finance falls through? Do you just lose your deposit?

You lose your deposit PLUS you can be up for the difference in sale price if it gets sold for less to the next buyer, plus you pay for the sale costs. On a $1M home you could be up for multiple $100,000s of dollars.

You really, really have to have your ducks in a row.

I sold a house by auction last year on the Central Coast and the cost was just 3.3% (err, might have been 2.75% cannot remember) of sale price, which included advertising, everything. Drive-away, no more to pay. This was on a ~$400k property. Cost was the same for private treaty.