This can be for example due to some repairs that may need doing or the general condition of the property. In auction this is flipped upside down, the price starts at a low point and steadily increases. When putting your house on sale via way of modern online auction, a reserve price is agreed with the auction manager, which is the amount which you would be happy to sell the property for. The reserve price will depend on a few aspects such as: how fast you want to sell the property for, if it has been on the open market before and for how long, amongst others factors.

The reserve price is kept confidential between the seller and auction manager, and no potential buyer or other partner estate agent finds out about it.

As the reserve price is secret, we need a starting point at which negotiations can start – this is called the starting bid. The starting bid is lower, and not what the property will actually sell for. The starting bid can be close to the reserve price, or it can be quite wide apart from it.

It can be a common reaction for sellers to be alarmed when they hear the lower starting bid, especially when it is published on the live bidding platform, Rightmove, Zoopla and offline, locally.

The usual concern is that the starting bid will be viewed as the value of the property, and sellers may fear that prospective buyers may think that there is something wrong with the property. They may also be concerned as the don’t want to feel like they are misleading the prospective buyers.

These are understandable reactions when someone is new to auction, however, the well-seasoned auction users know the drill and know the advantage it brings later in the auction process.

Most of our buyer clients are experienced investors and landlords, who are well versed in: the type of property they want to buy, location and other particulars. So much so that a lot of them don’t even come to view the property. And yes, we do have individuals and first time buyer clients, however, these are a much smaller fraction.

The well-seasoned sellers know that advertising the property on a lower starting bid can generate huge interest that then carries through as the bids increase higher and higher. It is needed to drive up the sale price.

The greater interest, the more prospective buyers will view the property, enquire about it, do their own research and ultimately see that the property is worth more than that. They will see it as an absolute bargain. These will be the prospective engaged buyers in the auction process, ready to bid at auction.

So bear this in mind when discussing the starting bid with an auction manager, and don’t panic. More bidders mean the bidding will be more competitive and that the property will be sold for more money. For how our auction process works, click here. To speak with one of the team to learn more about auction call 0330 223 8118 or fill in the free consultation form below.