Is Auction Still the Answer?
Wednesday 30 May 2018
My answer to that question is, yes. Whilst it might be tempting to believe the value of an auction campaign is diminishing in line with the declining clearance rate, it would be wrong. Auction isn’t the issue. And for the record Morton achieved a 100% auction clearance rate on the weekend. So what’s the deal?
How can the official auction clearance rate be so low if auction really is still the best way to go?
Well firstly let me say on the weekend Morton achieved great results in two very different Sydney marketplaces. A property in Little Bay sold for $1 million which was $50,000 over the reserve and a property in Pyrmont sold under the hammer for $4,3 million.
They are both great examples of what can be achieved using the auction process with the right property, the right strategy and most importantly, the right expectations. The right agent will ensure a vendor has the right expectations and has confidence in the experience and determination of their agent to manage the process to get the right result.
In my opinion the most important element to an auction campaign achieving the best possible deal in both a strong and a softening market, is the fact that it takes the price out of the equation. It lets the market set the price but for the auction to succeed vendors need to ensure they temper their expectations to allow that process to unfold.
Don’t get me wrong, if done correctly an auction campaign still leaves nothing to chance. An auction marketing campaign involves much more than simply setting a date and waiting for potential buyers to show up with a chequebook in hand! Not a chance. Our team roll out an intensive strategy of communication and presentations designed to drive buyer interest and build anticipation in the lead up to auction day.
But the fact does remain that only on the day will the price potential buyers are prepared to pay be fully revealed and that marks the realistic value of the property on that day. The risk to a successful auction outcome is a vendor with a price expectation that has identified on emotion and need rather than value and realism.
My advice is that with the right agent the right advice is to have faith in the auction process. It is the best option to deliver on the day.