Is now the time?
Wednesday 10 Oct 2018
With reports of declining clearance rates as the market continues to adjust and find a new normal, the considered wisdom amongst many potential vendors is to steer away from auction as a preferred method of sale. Many believe now is not the time to go to auction. With respect, I fundamentally I disagree with that approach.
There is no doubt an auction campaign works in a competitive market. It sets a definitive deadline for decisions. It drives demand. It demands action and forces interested parties to determine exactly what they are prepared to pay for a property. It works.
Auction is the perfect way in a strong market to identify exactly the true value of a property at a moment in time.
And so it is right now. I strongly encourage potential vendors to consider auction as the best method to market and sell their property in any, indeed all, market conditions.
Vendors want to secure the best possible price for their property. Of course they will always be looking for top dollar but the issue at the moment is buyers are highly sensitive to paying too much in an environment where it is now expected some discounts should be achievable.
An auction campaign allows potential buyers flexibility but at the same time it drives decision making. In contrast the risk of listing for sale by private treaty is that potential buyers won’t be motivated to engage.
There is no denying auction clearance rates have declined. I think that’s as a result of buyers determined not to overpay and vendors reluctance to acknowledge they can no longer automatically expect double-digit growth.
Of course there is potential that an auction campaign will identify a value not acceptable to the vendors. That’s never easy. It can be a hard truth to hear but with that knowledge a vendor is empowered to take control and make decisions about how to proceed.
At Morton our aim is to support our clients make informed property decisions. An auction campaign remains our recommended strategy to deliver the best possible outcomes for our clients. Now is definitely the right time.