Question of the Week - How is the auction reserve price decided?

Описание: Question of the week - How is the auction reserve price decided?

This is one of the questions that I am asked most, and the answer to that is that it will always vary depending upon the agent, interest in the property, vendors circumstances, if there have been offers prior to auction, auction strategy and even the location of the property or demographics of the registered bidders.

Where the vendor is the government, they will usually have an independent valuation completed which will aid in setting the reserve. This may also be the case for a deceased estate where the executor is not a beneficiary.

If there is a lot of interest in the property and plenty of registered bidders, then perhaps the reserve will be set lower to create more momentum in the auction, conversely if there is only 1 or 2 registered bidders, they may set the reserve at the top of the guide or even above, and the vendor can then reduce or adjust the reserve and negotiate during the auction.
These days I am seeing a lot of reserve prices set towards the top of the price, if a guide has been quoted.

Often the auctioneer may place a bid on behalf of the vendor, if the reserve has not been met.

Many auctioneers these days will not use the famous words “on the Market”, so unless you are an experienced bidder, many buyers may not be aware when the reserve has been met.

If you have any questions around the auction process, or require us to bid at auction on your behalf, please get in touch, I would be happy to assist.