When it comes to selling the biggest asset you own, it can boil down to one very big question: should you Auction to sell your home?
You have a couple of options that you can use – Auction and Private Treaty.
The next chapter in the Gott Realty series of Tips for Selling your Home – Auction Auction Auction will talk about whether it’s a path you should follow or not when deciding the future of your home.
Auction is one of the oldest selling methods in Australia for real estate.
Melbourne is the auction capital of Australia, followed closely by Sydney and then most of the other capitals have some form of auction presence taking place.
Recent Auction Success
In Melbourne and Sydney, auctions appear to work. Analysing them over the last few years and the auction clearance rates have been up to 90% in Melbourne and over 70% in Sydney. Looking at Brisbane in comparison, the clearance rate in the same period has been around 50% at best.
Looking at today’s market, there is a significant difference in all market clearance with Brisbane down to around 30% and the other state capitals clearance rates dropping significantly.
When Auctions Work Best
Auctions appear to work in any market especially in the inner-city suburbs. Naturally, if the market is booming, like Sydney and Melbourne have been, it is always a good idea to sell your property by auction.
A rising market means more buyers. More buyers lends itself to buyer competition for properties and hence auction clearance rates are on the rise to the dizzy heights that Melbourne achieved in recent times.
Selling by Auction in the Suburbs
As an agency, we have auctioned many properties over the last 40 years, from waterfront units and houses to commercial and industrial properties.
Our experience and the statistics have shown that auctioning a residential home in the suburbs is not that successful.
Looking at the past few years around the north west suburbs, sold by auction has been extremely low across all property types.
The reasons behind this have a lot to do with the latest technology available to buyers, sellers and agents to determine a price a property might sell for. Plus, the market in these suburbs has been very flat for over 10 years with the exception of mini-booms taking place in Bray Park and Lawnton (just to name a couple).
So, selling by auction with low clearance rates can be risky, especially if the property does not sell and then sits on the market after the auction causing it to stagnate.
Properties worth considering for Auction
Unique properties are the best in the suburbs. Properties that are hard to place a price on from websites like CoreLogic – who have the most up to date property information available.
If there are no examples of similar homes that have sold in the past 6 to 9 months, then it is going to be very difficult to work out a starting price. These are the type of home that lend themselves to auction.
Another approach to ascertaining a starting price for a unique building, is to engage the services of a registered valuer and then taking the property to auction with a predetermined reserve or idea of what the property could sell for.
Running an Auction Campaign
The beauty of auction is that you have a sale date booked in and that is Auction Day. But there are a number of steps to be taken leading up to that day:
- Prior to auction, the seller needs to prepare the home for the market.
- Select an agency with experience in running auction campaigns.
- The selected agency then has to choose a registered auctioneer, if they don’t have one on staff. Selecting a very experienced auctioneer is critical to the success or failure of the auction.
- Select a very good promotional campaign to attract as many potential buyers as possible.
- Newspaper placement is a good idea as well.
- Have an open home every Saturday and some mid-week open homes go well as well before Auction Day.
- Contracts prepared prior to Auction Day. (Note: buyers have to do all building and pest inspections at their cost before the auction takes place.)
- Auction Day
– the salesperson arrives early and prepares the property with flags and bunting.
– the auctioneer will arrive and chat to the sellers about reserve price, etc.
– all buyers need to be registered and given numbered bidding paddles ahead of the start of the auction.
– Auctioneer starts by reading out the terms and conditions for bidding at auction, calls the auction and hopefully the home sells on the day.
- If the property is not sold then the third phase of the auction program kicks in and the property is marketed with a price, in most cases, until sold.
Last Minute Tips
If you have an unusual property and something a little different, an auction campaign could be the best option for you.
Always explore all selling options whether it be by Auction or Private Treaty – which displays a price.
Always do your homework into working out a price. Don’t believe every price told to you by one agent, seek a few opinions on pricing your home for the market from at least three agents.
Consider everything carefully before opting into an auction campaign, especially if you have a home that can be easily priced from past sales.
Tips for Selling Your Home – Auction Auction Auction
Thinking of selling your home? Speak to Gott Realty today!
If you’re looking for a real estate team that is honest, respectful and always acting in your interests, speak to us today about how much your home is worth.
Our team has unprecedented access to local property data and insights, and we are here to help you sell your property for the best price possible with the least amount of stress.
Gott Realty service Albany Creek, Eatons Hill, Cashmere, Warner, Lawnton and Bray Park and many more areas across North Brisbane. Learn more here on our blog.