Disclaimer: These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.
Market conditions have been tough and whilst recent improvements are encouraging, the average time on market for a home in and around Fremantle is at 68 days. Those who need to sell and sell quickly, often opt for an auction given reported statistics for days on market for such campaigns is 28 days.
I’m an advocate for the auction process as a method of sale for a number of reasons. Certainly, it’s a transparent process with all buyers able to see their competing buyer and the auctioneer bound by a strict REIWA code of conduct that brings fairness to the process. Buyers also usually have time (unless the seller accepts an offer prior to auction) to view the property several times, undertake all necessary diligence and arrange finance prior to auction day with only a slim chance of not having an opportunity to buy on auction day.
The benefits to sellers include a cash, unconditional contract, a settlement period that suits their needs, a healthy deposit and the delivery of what is the very definition of fair market value. The “no price” marketing strategy in the lead up to the auction day is beneficial as it captures all possible buyers, including those deterred by an unrealistically high asking price for property offered for sale by private treaty.
And if the property is being sold under an executorship arrangement, then auction is really the best option.
However, offering a property to market via the auction process each and every time for each and every property is not necessarily the right approach.
Sellers are often under significant pressure from their agents to “meet the market” on the day of auction even if the best live bid is below their original reserve price. The lead up to the auction day can be stressful too with multiple home opens and inspections during the weeks prior.
Some buyers remain deterred by the auction process too; either too nervous to bid or unprepared to buy property without certain conditions such as finance approval for example.
In the event the property is passed in, the sellers’ disappointment is palpable despite the auction day being only one part of the marketing and selling process with potential buyers unprepared to bid naturally translating the lack of bidding into a lack of interest and therefore an opportunity to buy at a lower price.
When selling be sure to ask your agent about all the options when coming to market as there’s benefits with all methods of sale. It’s a matter of choosing one that suits your needs and circumstances and agents should be offering you that choice.
by Hayden Groves
REIA Deputy President