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Setting the Right Reserve Price for the Auction of Your Home

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If you're selling your home or investment property via auction, the key to a successful sale is setting a realistic reserve price. A reserve that is too low could see you missing out on thousands of dollars, while setting it too high may price your property out of the market. PRD are the local Canberra real estate agents with a reputation for achieving exceptional sales results. Getting the balance right between a high enough price to make a profit, whilst being fair enough to maintain bidding momentum is difficult. Let’s explore what a reserve price means, and a few factors to think about to ensure you set it appropriately.

What Is an Auction Reserve?

Simply, it is the minimum price a vendor is willing to accept for the sale of their property. Set by the seller and confidential to everyone except the seller and the auctioneer, when the reserve price has been reached during the bidding war, the auctioneer will announce that reserve has been met and the property is on the market. This means the property will be sold to the highest bidder, it will not be passed in.

If the bidding does not meet or exceed the reserve during the auction process, then the agent will negotiate with the highest bidder to see if they can reach a sale price that is satisfactory to both the vendor and buyer.

Things to Consider When Determining the Reserve Price

As the vendor, it’s your responsibility to set the reserve so there’s a few important things you should take into consideration to ensure the price is suitable.

Your Initial Property Appraisal

When you first decided to sell, your real estate agent would have appraised your property. They would have provided a valuation based on its key selling features including its size, the number of bedrooms and bathrooms, its condition, its fixtures and fittings and the quality of any renovations. They would have also assessed the property’s location and potential buyer appeal as well as comparative properties that have sold in the area recently, the current competition and any current market trends. The price you received is an excellent starting point for determining the reserve.

Feedback from Experienced Local Canberra Real Estate Agents

Local agents understand the area and are across what is happening with other properties for sale. Canberra is home to many agents, but it is always best to engage one that is experienced in your specific neighbourhood. They will be able to advise you what similar properties are selling for, the level of interest they are receiving and give insights into trends in the general market.

Pre-Auction Interest

If you have had any pre-auction offers, it’s a good sign that there is interest in your property and can give you an insight into what you may be able to fetch for your home. While you may have decided not to accept any of the offers, it provides a great starting point to work from with regards to your setting your reserve.

For Expert Property Valuations, Canberra Locals Can Trust PRDNationwide

If you are selling a property, it’s important to seek the right advice and do your research before setting your reserve price. Listen to the market, try not to get sentimental about your property and try to be realistic with your figure. Talking to your agent, getting accurate property valuations and reviewing current market conditions, will all help guide you to set the right reserve price. To work with a reliable Canberra agent to sell your property get in touch with us today by calling (02) 6262 5232 or send us an enquiry online now.