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For sellers

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SELLING PROPERTY AT AUCTIONS

Property auctions are exciting, dynamic and an easy way of buying and selling properties. They definitely have an "edge of the seat" quality to them.

As a seller auctions give you the opportunity to reach a whole new set of potential, prospective buyers.

Property auctions can give you a quick sale!

Today sellers like you, are choosing to sell through the sale room.

Why? Well two reasons. There is a clear timetable for the sale - 30 days or less. Great if you're looking to sell your property quickly.

Also, in today's market, if the marketing is done correctly, you get a good price. This partly explains why an increasing number of properties are being sold through the sale room - at ever higher prices.

Here you will find out how to sell your property at auction:

  • Which properties sell well and why
  • Why you can achieve a good price at auction
  • How to use auctions to sell your property quickly
  • The advantages of selling through property auctions
  • The risks of selling at auction
  • How property auctions work
  • How to make people bid on your property
  • The main things to consider when selling property at auction

The main question to consider is whether a property auction is the right place to sell your property.

THE ADVANTAGES OF SELLING AT A PROPERTY AUCTION

Certainty
You get a commitment to buy. The Contract of sale is signed at the auction venue and it comes into force as soon as the gavel falls.

It's quick
The timeframe is usually much shorter than for properties sold via adverts, estate agents etc. Ideal if you want to sell your house quickly.

Price
The format lets bidders drive up prices. Competitive bidding at a property auction for some types of properties can achieve close to open market or better prices.

Integrity
You won't be messed around by buyers (or at least the possibility is extremely remote). There's no room for re-negotiation. All this assumes a reasonable reserve price and starting bid.

THE RISKS OF SELLING AT AN AUCTION

The main risks associated with selling your house at a property auction can be summarized as:

  • your property may not sell
  • your buyer may fail to meet the completion date
  • you may still incur sales commission costs if your property sells before the auction

SHOULD YOU SELL YOUR PROPERTY AT AUCTION

We will be happy to discuss the pros and cons of selling your property at auction. We will take your particular circumstances into consideration.

As a potential vendor, we will advise you on the best method of selling your property, taking into account the circumstances under which you are selling. This should be part of our discussion with you when your property is appraised. We recommend you read our business terms and conditions (general and special), in order to familiarise with general methods and auctions process.

HOW PROPERTY AUCTIONS ACTUALLY WORK

The mechanics of selling your house at auction are actually very simple:

  • you pay entry fees and sale fees- commission
  • you set the minimum price (reserve price)
  • bids are made in an open, competitive environment so the sale price achieved is public knowledge but..
  • you can't choose the buyer
  • the highest bid wins as long as it meets or exceeds the reserve price
  • bidders can make as many bids as they want to
  • the contract to buy and sell is made as soon as the gavel falls
  • the whole process takes a maximum of 30 days - ideal if you want a quick sale

On the money side of things, fees are generally of two kinds: entry fees and sale (agents) commission fees. Entry fees are non-refundable. As a rule of thumb they cover the advertising of the sale and organizing the auction event, catalogue etc. This is usually only a few hundred Euros for each property.

The brokerage sale fee is the agent's commission and is typically around 3% (excluding VAT) of the final selling price and is regulated according to the fee policy by the Croatian Chamber of Commerce.

We follow the principle that vendor only pay the agency commission when a property is actually sold!

SERVICES COVERED BY THE ENTRY FEE

  • your property will be included in a bilingual colour auction catalogue, which is distributed to prospective buyers in Croatia and overseas
  • organized auction at a venue such as hotel or congress hall
  • minimum of 3 adverts promoting Croatia property auctions events
  • active marketing through our offices in Croatia and UK

It is of a paramount importance to set and establish a 'reserve price', which is a minimum price below which the property cannot be sold. The reserve price is confidential between the vendor and the auctioneer and it is not publicly available before and at the auction.

SELLING PROPERTY AT AUCTION- THE LEGAL SIDE

Our Agency Brokerage Contract will explain and determine your rights and obligations as the Seller and should be read together with our terms and conditions of business. It is a legal document, therefore should be read carefully. In between the details will include:

  • providing proof you have the authority to offer the property for sale
  • seller provides and deliver us; title deeds, copy of the cadastral plan, list of possessors, location and building permit, usage permit and a property photo in electronic format
  • seller confirms in writing a 'reserve price' (below which the property cannot be sold) no later than 5 days before the auction
  • seller provides a written and notarized Power of Attorney, giving binding authority to the auctioneer to negotiate, enter and sign a Contract at auction
  • seller is to provide their solicitors details
  • by signing an Agency's Brokerage Contract, seller commits to pay Entry fees related to organizing the property auction, as well as agency's commission for properties sold and fees associated with the sale

MANAGING AND ORGANISING VIEWINGS

Viewings are typically organized and conducted between the auctioneers and the sellers. As you are selling your own home, you may decide to conduct the viewings yourself. If your house is empty, then viewings will be undertaken by the auctioneer's staff and associates or sellers.

If your property has tenants then try to come to some arrangement with them about making the property accessible for viewings. If there is no access for viewings the chances of selling your property are sharply reduced.

HANDLING PRE-AUCTION OFFERS

Auction buyers can make offers on properties before the actual date of the auction.

Some types of sellers are unlikely to accept such offers, but private sellers generally do not come into this category.

Any offers worth considering will be passed to seller by the auctioneer. If offers are made at or around the guide price the auctioneer may advise waiting for the auction itself - as this indicates competitive bidding to come.

It is up to the seller whether they wait or accept a pre-auction offer. If the seller really needs to sell their property quickly then they may well decide to accept a pre-auction offer if it meets their needs and objectives as well as circumstances under which they are selling.

WHAT HAPPENS AFTER THE AUCTION

Once the buyer has signed the Contract, the buyer is obliged to pay the 10% deposit of the contracted price to the auctioneer's bank account. The auctioneer will deduct their commission fees from that deposit and transfer the remains of the deposit to the seller.

From there things should be pretty plain sailing. The buyer will be required to pay the outstanding balance within 30 days from the date of signing the Contract, which is normally the auction date.

If for any reason the property does not sell at auction, the auctioneer would invite any prospective buyers to come forward with their bids and offers which will be forwarded to the sellers.

Note that the auction route can be used as an adjunct to selling a property through an estate agent. And indeed, many properties auctioned are actually on an agent's books before the auction.

Our Brokerage contract stipulates that we are appointed agent. If the property sells to a buyer introduced by another agent, seller still has to pay our agency's commission.

This means if your property is on the market with another agency read their terms very carefully, as you could find yourself liable for two sets of fees.

 

For any additional information please contact us:

[email protected]

Croatia office: + 385 (0) 1 383 9663

 

UK office: + 44 (0) 203 176 0939

We wish you a successful auction of your property!