commercial real estate training

Tips for Auctioning a Commercial Property Today

Even when the commercial property market is slow and difficult, there are certain advantages in the auction process that should not be overlooked or under estimated. The greatest advantage for all concerned is that the auction process gives momentum to the serious buyers that are available today and looking for property to purchase.

Even in the toughest of property markets, there will always be buyers available for most quality properties. The auctioning of a property is a very focused method of sale; it is implemented over a period of 6 to 8 weeks. During that time the appointed salesperson, the agency, and the client all have a vested interest to implement the strategy required to create buyer interest.

If the client is serious about taking their quality property to the market, then an auction process is worthwhile considering. The property may sell on the day or it may sell soon thereafter. Importantly the salesperson in the auction process has done the necessary work to flush out a few potential buyers that will be lodging offers as appropriate.

Realistic clients

The client or owner of the property that is to be auctioned has to be realistic regards expected current market prices; that conditioning or information process is really the job of the salesperson to provide and implement. The client needs to be fully informed regards the factors of the local property market as they apply to the property type and the method of sale.


Another clear advantage of the auction process is that the resultant contract is normally unconditional and will proceed to a precise and timely settlement. The factors and delays of due diligence and subject to courses that you see in normal contracts do not normally apply in auctions between the time of sale and settlement. That being said, the client must ensure that all relevant facts and property details are accurate and correct prior to the auction marketing and inspection process. The bidders on the auction day need to be fully informed about the property prior to the placing of their bids.

Success rates

The auction success rates will vary from time to time in your local area based on the amount of enquiry and the number of people that attend the property auction on the day. That being said, every property that is taken to auction has to be taken through a serious amount of marketing and deliberate attention to detail so that the correct amount of enquiry can be generated. Here are some clear strategies and tips that can apply to the auction of listing and marketing process.

  1. The auction method of sale is a timed strategy designed to flush out the buyers in the market. Genuine buyers always exist for a quality property; you just need to find them.
  2. The momentum of an auction should be timed across a period of 6 to 8 weeks. Most of the marketing campaign should be expended in the first half of that time period.
  3. Create a quality information memorandum relative to the property prior to the commencement marketing. When people make enquiries, and they are suitably qualified, you need to be sending out the information memorandum quickly and efficiently.
  4. Depending on the property, there may be a need for confidentiality relating to the information memorandum that you are to issue. This is normally the case when you’re dealing with larger properties with extensive tenancy details and matters relating to financial performance. On that basis you may need a confidentiality agreement to be signed prior to providing the information memorandum and inspecting the property with qualified prospects.
  5. Design a comprehensive marketing campaign that is targeted to a specific target audience and regional location. Most purchases of commercial property today come from the same general region.
  6. Check out the prices for similar properties in the region over the last two years. Identify any competing properties that will be on the market at the same time as your subject property.
  7. Get all the necessary reports and documentation together that support the function of the property, the improvements, the tenancy mix, and the property ownership. All of this should be done prior to any marketing commencing. Remove any hurdles or problems as part of this preparation process.

In any commercial or retail property market and at any time, the auction process is worthwhile considering as an alternative method of marketing. If that is to be the choice applicable to the subject property then the property owner, the agency, and the salesperson need to establish a firm mutual strategy of auction marketing, inspection, and promotion to get the correct message of the property out to the targeted audience. If the client wants a timely result in selling their property then the auction process is worth considering.

By John Highman

John Highman is an International Commercial Real Estate Author, Conference Speaker, and Broadcaster living in Australia, who shares property investment ideas and information to online audiences Worldwide.