I recently auctioned a property for a very close friend’s family.
Sadly her grandmother had passed away and the family was tasked with selling the original family home. There was about six beneficiaries which can put quite a weight of responsibility on the shoulders of the executors.
As well as deceased estates I have had extensive experience with partnership breakdowns that require the sale of property. These can be divorces, business break ups, family disputes or some other partnership issue.
The sale of grandma’s house was emotional, but the result was well received by the family and there were a lot of pictures taken by the sold sign afterwards.
It’s not always so rosy. Over the years I’ve had white knuckled security guards, barristers puffed up like bullfrogs and heartbreaking tears from children as their parents bicker over money as they reminisce about better times inside the house.
In all of these circumstances it is essential that you walk away from the transaction knowing two things.
The first is that you got the best price in the market and the second is that everyone involved had at least the opportunity to achieve their expectation.
It is for this reason that banks and courts enforce auction as the method of sale in these circumstances.
The reason auction works is due to the uncapped price ceiling, auctions have no price, and the second is the end date, these matters require a conclusion.
In cases where parties can’t agree on price I generally recommend they set their reserve in line with the price expectation of the most optimistic person.
However I then recommend they consider all bids once we reach the level of the person with the lowest price expectation. Then ultimately they should “put the property on the market’’ or sell to the highest bidder if they achieve a bid between these two points. This allows everyone a voice and a chance to achieve what they want.
Ultimately a sale under the hammer at a public auction safeguards you against any disputes down the track.
When a property is announced it will be sold at public auction, it is free and open opportunity for any party to bid, which means the final price is the best price from the market on that day. There is no other method of sale that allows you to publicly display the offer of a interested buyer and then invite a better offer prior to a sale. This process eliminates arguments after the fact that a better price could have been achieved.
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