Auctions are seen by some as a way to stimulate competition for a property by having potential buyers bid against one another (and drive the price up in the process).  They can work well in a buoyant market.

How does it work?
The auction is set for a specific time and place. Interested buyers simply turn up on the day and place their bids.  You set a minimum (reserve) price before the auction, but this is not divulged to the bidders.  Once the bidding reaches this reserve price the property is ‘on the market’, which means it must then be sold to the highest bidder.  

Once the hammer falls on a sale, it is unconditional.  The buyer must then pay a deposit, which is given back if the deal does not go through.

If the bidding does not reach the reserve price, your home is ‘passed in’.  If that happens, the highest bidder is given the first chance to negotiate for a sale, so you may end up selling your home anyway.

From your point of view there is not much to think about in terms of negotiating strategy at auctions.  You simply leave it to the auctioneer to drive the price up as far as he or she can. 

Marketing your home for auction
There is usually a short, sharp marketing strategy for homes being auctioned with the aim being to interest as many people as possible in that time.  That means that the marketing costs can be significant, and you will have to pay them regardless of whether your home sells at the auction or not. 

Can you sell before the auction?
You can accept pre-auction offers if you wish to.  If an interested buyer does make an offer before the auction, the agent must notify anyone else who has registered their interest, and give them an opportunity to submit an offer as well.

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