In commercial real estate today, auction activity can be quite specific for the particular property. For this very reason, you should have a specific checklist for taking the property to auction.
If you choose to use this method of sale, then it should be for the right property and it should be done for the right reasons. Even in tough property market conditions, the auction process can work quite successfully providing the agent focuses effort and time into the marketing campaign to attract the right buyers.
As a successful method of sale, it requires specific effort to get the message out into the group of target buyers. Typically the campaign will go for a period of 6 to 8 weeks. During this time, the first half of the campaign will be critical to the momentum that you require. The marketing message has to reach the target audience comprehensively with a consistent offering and full property details.
Here is a checklist that you can use or adopt when considering the auction method of sale.
- Get the correct appointment to act signed in accordance with your agency laws and legislation.
- Review similar properties in the same location that could have an impact on your marketing campaign.
- Check out the subject property detail relative to the information provided by the client.
- Look for any unusual factors of property ownership or obligation that will have some impact on the auction sale campaign.
- Inspect the property comprehensively so that you have a good list of features and improvements to merge into the draft advertising.
- Get professional photographs taken of the property to use in the marketing campaign.
- Prepare a list of selling points that should feature in all of your advertising material.
- Review the property for the potential inspection process. Understand how you will take people around the property when they have been qualified for that process.
- Prepare draft advertising for the client to review and approve.
- From the approved advertising material, prepare a promotional brochure for distribution via e-mail, direct mail, and personal inspection.
- Review the database in your office for prospects that may have an interest in the property and that may be suitable for a pre-release property inspection.
- If the property involves leases and tenancies, you will need to comprehensively check all of those documents for details of income, expenditure, and property performance.
- Prepare an investment report or information memorandum to be used in the campaign. The detail within this document should be reviewed for accuracy and relevance. Get the client to approve the document in its final form and before it is dispatched to any prospects.
- Prepare the documentation relative to the auction method of sale. In some cases, this documentation should be prepared by the vendor’s solicitor.
- Start promoting the property and hold the inspections with qualified prospects.
- Keep the property owner fully briefed on inspection results and market feedback.
- As you move towards sale, it is relevant to get the property owners thoughts on the reserve price for the property. On the auction day, the reserve price should be given to you in writing.
- You may or may not want to take offers prior to auction. That is a strategic decision subject to the prevailing market conditions and the instruction of the vendor.
- The auction should proceed as planned unless the client has achieved a sale prior to the auction date. Suitable deposits and contracts should be exchanged subject to the method of sale used.
You can add to this list based on the property type, your location, and the particular vendor. This method of sale is quite unique and involves a dedicated promotional process that can only be achieved through an exclusive listing.
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