By Peter Hornor, chartered surveyor and auctioneer with Brown & Co in Norwich
We are continually being asked why an auction sale suits a wide variety of property whereas a private treaty sale which is the more conventional approach will surely suffice. This is particularly the case now as we finalise entries for our spring sale and you can imagine that we have seen a wide variety of people who all have questions as to the best approach to selling property. Of course we need to give the right advice and not all properties will suit an auction but increasingly vendors are looking to this approach for a number of reasons. Firstly, the auction sale offers a binding contract on the day which a private treaty sale does not. In a difficult market this is particularly beneficial; certainly during 2008 when the market was falling our residential department sometimes had to renegotiate the sale price after agreeing a figure and the auction approach eliminates this problem. Auctions are widely advertised and usually a 6 – 7 week advertising period assures blanket coverage which is a very important point as well. If this leads to a decisive result on the day then it meets with clients objectives. Valuation is difficult at the best of times. In a falling market, which we had some 12 – 18 months ago, it was difficult to assess where the value of a property should be. The advantage of an auction sale is that value is established on the day. Similarly, in executor situations where trustees need to be sure they are doing the best they can for their clients, an auction sale tests the market and achieves a result in the public
arena. Guide prices are of course relevant and can be the key. Very often we are able to exceed these considerably, but much will depend on particular demand and competition on the day. The reserve price is perhaps the key or the vital component part of all this. As Chartered Surveyors we have a duty to achieve the best possible price and are certainly not able to sell below the reserve, which itself is something that gives comfort and control to the vendor. The bolder approach is sometimes setting the more realistic reserve because this always stimulates interest and competition. That is surely what auctions are all about.
You can contact Peter on 01603 598238.