It is important for real estate agents to understand when and why an auction might represent the optimal method of sale.
In a recent webinar with REINSW, three industry experts – Jesse Davidson, Chair of the REINSW Auctioneers Chapter Committee, Damien Cooley, Founder and Owner of Cooley Auctions and a REINSW board member, and Lynette Malcolm, Licensed Real Estate Agent at Chadwick Real Estate – outlined the importance of auctioneering as a method of sale and how it can be deployed at any stage of the market cycle. They also discussed how to handle potential objections from vendors.
Advantages of auction
• Three-phase selling process: before auction; at auction; after auction
• Reduce days on market
• Achieve a premium price for owners
• Transparency – conduct business in an open, professional environment.
Why is auction an important method of sale?
“The big thing for real estate agents and owners is understanding that an auction is about trying to sell a property in a shorter period of time, for the best price in the market at that time,” said Damien. “Auction gives an owner an opportunity to sell for a great price, if there are multiple buyers and they want to compete for it.”
From an agent’s perspective, Lynette added. “There’s a misconception around auctions only being about getting a better price; it’s about actually controlling the process for the market in terms of a timeline of events. That urgency created by an auction or a date-based campaign, I’ve found to be very helpful.”.
Addressing owner objections to auction
Jesse raised the topic of addressing common owner objections to auction. “A lot of agents will try to avoid inviting objections because nobody likes confrontation, but unless you overcome those objections then it’s going to become a problem for you in 30 days’ time when you try to auction it,” he said.
Lynette added: “What’s been your experience with auction? It’s a really easy question an agent can ask. Very quickly you can see whether they’re fearful of it, they don’t understand it, or they need to be talked through the process with more detail.”
Objection: auctions don’t work in this area
In response to the objection that auctions may not work in a particular area, Damien said: “As a real estate agent let’s try and adapt to our market. Give buyers a price guide. Provide a building inspection, provide a pest inspection, provide a strata report. Try to do everything you possibly can to help the buyer, to remove the hurdles.”
Objection: why take a property to auction when the market is not booming?
“Why would an auction work on a declining market? I think it puts an end to a fall. If you’ve listed a property in early February at $620,000 and by early- to mid-March it’s at $600,000, my argument is to put a halt on it at $610,000 and go to auction at the end of February,” Jesse said.
Lynette added: “For agents, a declining market makes auction an easier option, because of the types of conversations you can have with buyers. If you’re on the market for sale, and whilst ever you can change the conversation with an adjustment in price, there’s no urgency, there’s no call to action.”
Have a question about your property? Speak with Lynette today to discuss all your real estate needs.