In real estate, many things are considered uncertain; the market fluctuates, buying patterns change and suburb hot spots vary.
What is certain however, is the big question mark on almost all sellers’ minds…How do I go about selling my property?
You wouldn’t be wrong thinking that auctions are mainly the domain of the Eastern States. However, the tide is slowly turning, and if the straight numbers and anything to go by, Perth is changing its tune.
Compared to 29.4% last year, auctions in Perth now have a clearance rate of 54%! An increase only matched by Sydney, who have almost 300 more total auctions this year so far. While our numbers in total auctions are still modest out West (19 for last year), we’re already on 12 for this year as we approach August.
Also, as you’ll discover in this post, auctions are great for those who need to get a property off their hands quickly. A property sold via auction remains on the market for an average of 28 days. Compare that to the average wait to sell your home privately, which sits around 79 days!
While we aim to give you unbiased, stat-based information so that you may make up your own mind, we won’t deny that we are big supporters of the auction process and what it can achieve for sellers.
Here’s a few more reasons you may wish to go down an auction path:
1.
A high intensity marketing campaign is conducted over a 3-4 week time frame, as opposed to a 12 week marketing plan. This puts the property on a pedestal above other properties and delivers maximum exposure in the first few weeks on the market – the time frame during which a property is most likely to sell.
2.
You take price out of the equation – by limiting the property to a certain price range, it also limits the amount of buyers you will appeal to. By removing the price factor, you are able to better attract a wider range of buyers, and more buyers leads to more competition! Also, when you advertise a price, buyers immediately start to discount and make an offer below your asking price. That means you have to negotiate down to meet them. Without a price, buyers start looking at a property on its merits and price negotiations move upwards.
3.
Control – in every other form of marketing that is available, the buyer is in control, not the seller. The buyer will dictate the terms of the contract (e.g. subject to finance, subject to sale, subject to building inspection). The buyer negotiates from a position of strength. When you sell by Auction, you set the settlement date, the terms and conditions and the reserve price. Meaning you control the process.
4.
You get a cash, unconditional contract – if the property sells before or on Auction Day.
5.
Auctions create a sense of urgency amongst buyers, which motivates buyers to make a decision on or before Auction day.
6.
You have 3 opportunities to sell with 3 competitive environments:
- Before Auction – buyers can make offers prior to Auction to avoid competition on Auction Day or if they cannot attend.
- Auction Day – Multiple bidders compete in cash unconditional environment, forcing the price upwards.
- After Auction – Conditional buyers (e.g. subject to sale, subject to finance, or cash buyers can now compete for the property)
7.
Auction Day negotiations are conducted in an ethical and transparent environment. Buyers can see what other buyers are offering and have a chance to better their bid.
8.
The seller is able to bid through the auctioneer to keep the price moving upwards (this is called “Vendor Bidding”), providing that Vendor bids are disclosed. A good auctioneer can squeeze every last dollar out of the negotiations.
9.
The Auction process will bring you the highest price the market is prepared to pay – this will occur whether the sale takes place before the Auction, on the day, or afterwards.
10.
Properties sold at Auction are generally on the market for fewer days than those sold using other methods.