Things to consider when going to auction
There’s a lot of things to consider when going to Auction, an Auction is a lot of pressure, there is a risk, and for the wrong property or in the wrong market, it can be detrimental to the campaign.
Let’s talk about market conditions. If the market is booming and we’re in a “seller’s market” then typically Auction could be the right decision. However, if it’s a property that’s very similar to a lot of others on the market, it may not be a good idea. For example, a standard 2-bedroom apartment in an overdeveloped area, where there might be big supply and small demand in that micro market, gives buyers excess choice so they can play it cool and not come to the Auction.
As above, for the wrong property, an auction can be detrimental to the campaign. An auction relies on competition, and if there is more supply than there is demand, as the example above, or in a rural area then private treaty might be a better option. As a real-life example, we took an apartment in Sydney CBD to market in 2020 during the height of the pandemic, at one point there were 250 comparable properties on the market, this required a very different selling strategy to a few years later when the market was booming.
When it comes to the risks of auctions, the level can vary based on the market. but the main risk is that you won’t get the buyers on the day and won’t achieve a price you’re happy with. We know from experience that the prime time for selling a property is 20-50 days, any more than that and buyers start to ask questions as to why the property hasn’t been bought. Given that a standard auction campaign is circa 30 days, that only leaves 20 days to re-strategise a failed auction campaign, and already buyers will be wondering why it didn’t sell at auction.
Don’t get me wrong, we sell many properties at auction, we’re very good at it, but we’re also expert negotiators, and we won’t advise you to go down that road if it’s not the best option for you.
A good auction campaign takes a lot of work
Many people assume that most agents take properties to auction because it’s easier, not true. In an auction campaign, there’s no time for mistakes, there’s not much time to redirect the campaign if need be. The agent must be on top of everything from the moment the property goes online. However, when done right, an auction can be a wonderful way to sell your property. An auction relies on competition, so a good agent will be able to read buyers, read between the lines of what they’re saying, know who to target and who to let go. As well as the agent, a good auctioneer will be able to keep the momentum going for as long as needed, and it can be a spectacular performance!
How to decide?
When assessing an agent, go to some of their auctions, talk to them about their strategy, look for an agent who SELLS a lot of properties at auctions, not just has a lot of properties going to auction. These days, there’s a tendency for vendors to gravitate towards the agent who has the most properties on the market, as we’ve said above, it takes a lot of work for a successful auction, does your agent have the capacity to take on more work? Don’t be afraid to ask to meet the auctioneer before you make a decision, they’re a crucial part in the process, and they should be there from the beginning.
If you’re on the fence about whether an auction is right for you or not, get in touch with us today.
