The auction process can be stressful, exciting and rewarding depending on which side of the fence you sit. Regardless of the outcome, there are certain rules, processes and conditions that both bidders and sellers should be aware of going into an auction that can help keep emotions in check and make sure everyone knows where they stand once the hammer has fallen.
Going in with your eyes open about the demands the process entails, seeking wise counsel from trusted industry experts and having a fixed plan and sticking to it, regardless of which side of the hammer you fall on, can be crucial tools going into auction day, advises Abel Property principal Claude Iaconi. He said there is an old saying that although all properties are auctionable, not all vendors are.
“The process is tried and proven but not all those going into it can stand the heightened stress the journey entails.”
Mr Iaconi said the advantages for sellers considering the auction process, is that it brings results to a head in a limited time frame as well as offering vendors three opportunities to achieve a sale preauction, under the hammer or offers immediately after auction. “Our current clearance rate at auction is 83%, meaning our homes are selling in an average of 30 days nearly half the industry average,” he said.
Traditionally an auction adverse market, Mr Iaconi said increasing sophistication of buyers in the Perth market means they are at ease with the auction process as well as increasing acceptance from agents and banks, had helped pave the way for their increasing use of auction as a means of sale in WA. “Auctions do work but they are harder work for the agent and require a greater level of communication with buyers and sellers than private treaty,” he said. “Knowing the property will go under the hammer in 28 days from the first home open can be a great motivator for the agent as well as the fear of having no one turn out on the day.
“There’s a great reason why the process is so popular in the eastern states and that’s because it works.”
He said advantages for those contemplating buying at auction were the ability to see what other buyers were bidding on the day. “I’ve sold some homes where the winning bid was only $500 more than the losing one which offers buyers the assurance that they not overpaying because you can see what the competition is offering,” he added.
Mr Iaconi’s advice for buyers is to come prepared with a bank cheque, formulate a game plan and stick to it and figure out what you’re willing to pay and when you’re willing to walk away. “Regret is a bitter pill to swallow, so bid to your maximum, stay close to the auctioneer and make sure the agent can see and hear you,” Mr Iaconi said.
He said the advantages for sellers were that they were almost assured of an outcome so they can move on with their lives and could be comfortable knowing that a home sold at auction – at the best market price – was not subject to any conditions.”
He said agents in WA have traditionally seen it as a failure if the home didn’t sell under the hammer; however statistics say that if it didn’t sell on the day it will sell soon after. With average days on market in Perth currently 76, selling at the current auction success rate of 28 days is the better option, one would think?
Mr Iaconi went on to add: “Many inner city agents have very little or no experience in executing a highly professional and slick auction campaign which is why many of them avoid advocating this proven and successful method of sale. “They actively dissuade sellers from auctioning because not only are they inexperienced, but it’s actually more labour intensive and put them under the microscope. Hence defaulting to private treaty is an easier option”.
If you’re selling, call Claude Iaconi on 0412 427 877 for a frank and intelligent chat about which selling method will best suit your property and circumstances.