After analysing our current season campaigns, we remain more convinced than ever that our auction programmes continue to serve our vendors very well, including times like these where buyers are looking for confidence that the property is genuinely on the market and for sale.
The requirements on buyers to be ready for auction are significant, given access to borrowed capital continues to be challenging.
Buyer engagement is key to any marketing process. So, having a clear signal that the property is on the market and for sale allows us to engage with a broad range of potential buyers.
There is often a misconception that conditional purchasers are excluded from the process; anybody can ask the sales consultant to help prepare a conditional agreement that can be presented to the vendor immediately after an auction fails to generate an unconditional result on the day.
A significant percentage of properties that don’t clear at auction have a contract on them within 1 to 10 business days of the auction date.
The auction process is there to generate unconditional offers; specific buyer terms can be agreed upon pre-auction, too, but the bidding on the day is unconditional.
This is where the magic happens. The price discovery process of an auction is the most transparent selling method there is.
It may surprise readers we often complete auctions with only one unconditional bidder in the room. Given all the advisers required to make the final decision to complete a sale are present on the day. The threat of third-party conditional interest immediately after the auction remains a significant motivating factor to reach an acceptable price on the fall of the hammer.
As a vendor, you are in control – you set the possession date that suits you; if the price does not meet your expectations, you are not obliged to sell.
The structure of the sale should not be complicated. The auction documents are prepared ahead of the auction, and you control what goes into them.
This is a highly effective way of creating buyer competition to ensure the best possible price. It places a time frame on the sale. This, in turn, instils urgency into the minds of prospective purchasers and allows the vendor to determine the terms and conditions.
By marketing without a price, you are never limited by an “asking price” that is too high or too low. When a property is sold at auction, the sale is unconditional, a 10% deposit is paid, and a settlement date is predetermined.
In the end, our advice is always to get advice on all matters of real estate and talk to our team about your best options. I will leave you with this insight, we have seen time and time again buyers prepared to bid much further on auction day than previously indicated. Equally, vendors are in a much better position to make an informed decision on the day.
Conrad Wilkshire, GM Rural for Property Brokers Ltd
