BY SCOTT AUER, RAY WHITE TINGALPA
To auction or not? If you ask this question at a weekend BBQ you will no doubt get a barrage of opinions for and against auctioning your property. So why do owners auction their properties? And what’s in it for buyers?
For sellers, auctions provide a structured process where they choose the sale date and have the simplicity of an unconditional cash contract at the fall of the hammer. Combined with a typical 30-day settlement, the seller has plenty of time to prepare for settlement day. Plus, the seller can sell prior to auction, on auction day, or post-auction if not sold under the hammer.
For buyers, the auction environment provides price transparency of other bids, as opposed to the uncertainty of the private treaty process, where you never really know where your offer needs to be to secure the property. Following the private treaty process, potential buyers often find out they were possibly very close to the winning price but never got the opportunity to submit their final best price. With auctions, you can submit as many offers as you like until the hammer drops.
In the current market, with buyers being more measured, considered and thoughtful, the auction process brings urgency and energy to the transaction while setting a time limit of the auction day for buyers to make a decision.
Ray White data for August shows auctions having a superior clearance rate over private treaty, with a 67% auction clearance rate vs 48% for private treaty*.
With the spring selling season getting into full swing, it would be worth considering an auction for your upcoming sale.
*at 60 days on market