Everyday we hear people saying that they don't want to auction their home in this market.. we wholeheartedly disagree (property dependant of course!). We are huge advocates for the auction process and we see time and time again the fantastic results that auction can provide.
Our CEO, Chris Kennedy agrees. Here's what he has to say on the topic....
The fast and energetic property market of a year ago has passed. Sales are down and prices are easing around the country. We are often told that auction is the best method of sale in a hot market when there is good competition. The logic being that auctions encourage potential buyers to go to their maximum price in a competitive bidding environment.
But what about in a cooling market when competition is less intense? Harcourts CEO Chris Kennedy says auction is always the best way to reach the highest possible price – no matter what stage the property market cycle is at.
“When you market your property with a price, you immediately set a limit on what you can achieve. No one will pay more than the price you have set.
“Auction, by comparison, invites potential buyers to consider what is the maximum amount they are prepared to pay for a property. They will come to the auction having secured bank loan approval to a certain level and will already have in mind their maximum figure.”
Kennedy says auctions are highly charged environments and if there are just two groups keen on a property you have the formula to achieve top dollar. However, even if there is just one interested party at the auction, the vendor is in a good position to negotiate with a highly motivated buyer, who has secured finance and has their top price in mind.
“A skilled auctioneer will be experienced and adept at negotiations when there is just one interested party and a vendor involved. And for this reason, many properties that are passed in, will sell later on the same day of the auction.”
Kennedy says it should also be noted there are also upsides for buyers in the auction process.
“Auctions are completely transparent. All the action happens in public and the buyer can go away knowing they have paid the price the market has determined for a property.”