Auction your home to get the best of both worlds
Why Auction should be the method to sell your home… in any market
A big talking point in the media is a focus on how the auction market has changed and whether auctions are “dead” in the current environment. Let me put the record straight. In the Harcourts camp on average, 50% of our listings are auctions. Why? Because as a company and a brand, we recognise and believe it is still the best and fairest method of sale across all markets.
The auction system has a number of benefits and, depending on the prevailing market conditions, they can alter. For example, for the last year or so, the main benefit to a seller was the ability of the auction system to achieve a premium, and this was amply demonstrated week-in week-out in the auction rooms over the past 18 months.
In this current environment, achieving a premium is definitely still a major benefit, but sitting on equal billing is the chance and/or ability to actually have a confirmed sale within your specific time frame. For some people, actually achieving a definite sale is of increasing importance. We know that around the country sales volumes are slowing, time on market is extending and the ability to finance a deal is harder, amongst other things. In this environment, property transactions that are conditional on the purchaser arranging finance are starting to take longer to confirm and, in some cases, fall over and force a start-over. The conditional real estate contract can sometimes just be an option in favour of the buyer while they sort themselves out and see if they really can afford your home.
In any market, regardless of the economy, there are always cash buyers out there. The auction is specifically designed to target the cash buyer first and give them the opportunity to purchase. If your property attracts an interested cash buyer during its allocated period of marketing, it will likely get sold. If there is no cash buyer interested over that specific marketing period, it will not sell and will be passed in.
But interestingly, over the three weeks of promotion, anyone interested (cash or otherwise) will still have seen your marketing. If a buyer is actively in the market and looking, they will have seen your property listing. They might not be in a position to bid on the day, but they will definitely have viewed the home online and probably still gone to the open home out of interest. That is why we find so many of the non-cash buyers are typically there, waiting in the wings on auction day to submit their written offer if the property is passed in.
The reality is, whether you choose auction or the deadline sale process, the marketing chosen and time frame are typically the same. With the deadline-type process, at the end of the three weeks of marketing, offers are submitted from any interested conditional buyers, and you sit and wait hoping the conditions in the contract are confirmed.
With auction, cash is king, and an unconditional deal could be the result. If there is no cash buyer or no deal and the property is passed in, any interested conditional buyers are then free to submit their offers just like the deadline style process. Hence, in this market here at Harcourts, we see auction as offering a seller two equally good options. The wise sellers who are still choosing to use us to auction their property know they can have a foot in both camps so to speak; there is an extra advantage to the seller.
In summary, a passed in property isn’t a fail as the media and non-auction people might profess. It just means that over that specific marketing period, there wasn’t a cash buyer interested enough to buy that particular property at that particular time. Any and all conditional buyers have still seen the marketing and can now get their chance as well, that is why so many of the passed-in auction properties will be placed under contract within 48 hours of the day of auction.
That is why Harcourts and consultants who really know what they are doing understand that auction works in all markets. It is still the best and most advantageous option available and that is why the best consultants will still recommend it as an option now for you to choose from. It literally offers the best of both worlds.