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 continue to challenge and whilst recent improvements are encouraging, the average time on market for a home in and around Fremantle remains above the long-term average. 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 be ready 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 a property offered for sale by private treaty
And if the property is being sold under an executorship arrangement, or the market price is difficult to determine, 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 highest 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 or no bids are received, the sellers’ disappointment is palpable with all the seller benefits of the auction process effectively handed to the buyers who now feel empowered to offer below market price, confident they have no competition.
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 offer you that choice.
By Hayden Groves
REIA Deputy President