The media has been carrying a number of stories recently to the effect of the rising number of auction sales – primarily as a reflection of a more active property market – “Sharp rise in Auctions” was how the Press reporter captured the mood of the 80 auction bookings last month in Christchurch through the Harcourts franchise of Grenadier.
However the question that article triggered in my mind, is how many auctions are there at any one time and what has been the trend over time?
Well the latest data certainly shows that the facts seen in Christchurch are reflected nationally.
In June there were 1,002 properties listed which were being marketed as auctions – that was up a whopping 160% from June last year and exactly double the number listed in June 2007 – at the very last breaths of the property bubble. July has continued that trend with a record 1,331 properties listed as auctions, an 180% increase year on year.
Going back over the past 2 ½ years shows no single month with as many auction listings – closest was March of this year at 826 and March 2007 with 816.
This chart above certainly highlights the steady rise of auctions as a preferred method of marketing properties for sale – 12 months of steady growth (as a % of all listings) rising from 3% last June to 12% in July of this year.
Auctions despite this data are not the predominant form of marketing nationally or regionally. In July over 50% of all auction listings were in the Auckland region, add to that the Canterbury region, Wiakato and the Bay of Plenty and you have an average of 8 out of 10 of all auctions. These same regions only account for 6 out of 10 of all homes for sale – clearly auction sale is not as popular in some areas of the country as others.
Wellington for example accounts for 6% of all new listings, but just 3% of auctions – clearly auctions as a marketing strategy is not universally adopted around the country.
The most popular and therefore favoured pricing strategy for new property listings is a Fixed Price – fully 60% of all listings over the past month were listed with a fixed price. By negotiation, offers and POA (price on application) accounting for a quarter leaving the options of tender and auction with 3% and 12% respectively.
Update 12 August
A valuable comment on this post has prompted me to share some richer information on auction listings. The question was asked as to whether the rise in auction listings could be attributable to the rise in mortgagee properties being listed of which the vast majority are auctioned. At this time there are 353 mortgagee listings on the website. A figure that represents aound 0.6% of all listings.
The chart below provides a clear view that even removing these mortgagee listings the number of new listings coming onto the market being marketed through an auction has risen significantly during the past couple of months.
It would be interesting to see the graph if you took slices through at say, $500 and $1M.
My guess is that the +$1M properties would nearly all be very low in fixed price, the $500-$1M having a higher Auctions percentage, and below $500 heavily Fixed Price.
JHS, that’s not our experience. We’re looking sub $500K and of the 11 open homes we’ve visited in the last 2 weekends, only 2 so far have been “by negotiation”, all the rest have been going to auction unless sold prior
John,
As ever you raise a good question – that is the beauty of the blog – however a rod for my own back!! – anyway don’t have the data to hand but will look to do some data mining to see what picture emerges.
Just goes to show the value of the data in the database!
I’d be keen to see if Alistair can show trends on time on the market for auction vs other methods.
In the Levin /Horowhenua Market there are neglible sales figures for properties above $500K – in fact there are only 14 residential sales above $300,000 in 2009. And yet as a franchise Harcourts are really seeing auctions acheiving shorter marketing periods (AKA selling in shorter times) for our residential listings.
Because have so few properties above $500K – its not a useful barometer for us – are there regional trends at play?
Auction is the best solution for most vendors in the current active Remuera market.
Mason
I am not sure how you can assert that auctions achieve a true shorter time on the market. By logic of a fixed event day an auction will if sold “under” the hammer result in a fixed time on the market – that time being set as the marketing period.
As compared to a traditional sale which will take as long to sell as the market dictates – so basically an apples with pear scenario.
There is a simple answer here – auction has simply grown in volume due to the number of mortgagee auctions that are now being conducted particularly in Auckland where there are at least 150 being auctioned every week!
It’s not because auctions are popular – It’s a very desperate method used by desperate sellers in desperate times!
Your own recent item said mortgagee sales had reached 4% of all sales: http://www.unconditional.co.nz/blog/mortgagee-sales-reach-4-of-all-property-sales-in-april.html
Russell,
A very well observed point. However these statistics are of listings – the number of properties being marketed on the website as auctions.
Whilst you are right that sales of mortgagee properties has risen to 4% of all sales. The actual number of mortgagee listings on the site still remains around 350 which amounts to around 0.6% of all listings.
I have decided that it would be useful to represent this data of auction listings factoring out the mortgagee listings, so with appreciation for highlighting this I will now update this post.
Mortgagees sell quite fast – often short 2 or 3 week campaigns so expect they do not accumulate on the site and are constantly being replaced with fresh listings.
Alistair – not all auctions sell under the hammer so their marketing can be open-ended BUT Harcourts MKH have solid empirical data on exclusive sales vs auction sales clearly showing that statistically our auctions are significantly more likley to sell in under 60 days than our exclusives and other Levin listings.
Most auctions I’ve seen don’t sell under the hammer right now but auctions are often negotiated quickly afterwards and are achieving higher conversion rates in a shorter timeframe than other marketing methods.
Levin has approx 400 listings (the vast majority are marketed with a price) and Levin as a whole is only seeing 20-40 sales a month (a 5%-10% conversion rate) – our auctions over the period I have been at Harcourts are converting at 60-80% (depending on the reporting periods and which MKH office you looked at).
I think its more than fair to compare successful auctions vs successful exclusives – and comparing the length of marketing period to achieve a result.
The last six months of Levin sales “averaged” 105 Days on the Market (with monthly average DOM’s ranging from 81 to 132 days) and that at least half of auctions are sold in under 60 days on that basis I am comfortable saying …”that auctions achieve a true shorter time on the market.”
Russell
Thanks again – great discussion. The data presented her is not of listings on the site, but the number of new listings coming onto the site, so therefore speed of sale has no bearing except to the point that a single property listed by either multiple agencies of re-listed by another agent after an initial campaign will “inflate” slightly “normal” listings – hope that makes sense.
Mason,
Clearly you hold this local information, at this time there is no aggregation of this data on a national basis, ie. how fast auction listing sell as compares to fixed price or tenders for example – this data will follow early next year!!
You’re missing a key aspect of this discussion guys – and that is whether auction per se is in the best interests of your client (i.e. the person who pays your commission)?
Auctions are a fabulous way for real estate agencies to sell property – but for property sellers (the client) there are serious issues to be aware of.
Here are some issues for property sellers (the bill-payer) to consider:
1. The auction system itself may be in direct conflict with the concept of ‘fair market value’. Fair market value implies a willing seller and a willing buyer unencumbered by undue pressure, each acting in their own best interests and a reasonable time for exposure in a free and open market. That doesn’t sound like the auction system to me.
2. The typical auction campaign timeframe of 3-4 weeks (sometimes less) is unlikely to expose a property to the maximum potential market for the optimum period. Potential buyers who need to sell a house first, or arrange finance, or terminate an investment, or repatriate money etc. are unlikely to be able to participate.
3. Auctions imply ‘no-price’ marketing – yet price is widely recognised as the single most important piece of information for buyers. No-price marketing really annoys buyers and many simply won’t take their initial interest further in the absence of an asking price. Why would any seller (or agent) want to annoy prospective buyers?
4. Although the typical auction campaign is 3-4 weeks the typical auction sole agency period is 3 months. Say what? The two should be consistent. If an agent says they only need to 3-4 weeks to sell a property by auction they shouldn’t need an agency period any longer than say one week post auction. If they need a 3 month agency they are hedging their bets that the property won’t sell at auction (and that is often the case).
5. When recommending going to auction, agents often have no idea how many buyers (if any) may participate in the auction. That’s a scary thought. Ask an auction-centric agent to quantify the number of bidders who will be at the auction and see what response you get!
6. There is no evidence to suggest that auctions achieve a higher price than sale by private treaty or tender – and indeed the exact opposite may in fact be true.
7. Many properties do not sell at auction. They sell before or after auction. This casts doubt on the value of the actual auction method itself for selling property. Agents will say that auction is only a part of the selling process – but it is a part that has a major influence on the price a seller (the client) might (or might not) achieve post-auction.
8. If a property does sell at auction it only sells for slightly more than the second highest bidder is prepared to pay. It is the ‘under-bidder’ who determines price.
9. By auction day, a property seller will have spent most (if not all) of their marketing budget and be in a vulnerable position if the property does not sell. This adds hugely to the pressure on a seller to accept any live offer on auction day (even if this is well below the seller’s price expectation).
10. Auctions allow agents to completely avoid the very hard issue of establishing an effective marketing price. This favours less qualified or skilled agents who simply rely on a 3-4 week auction ‘process’ to establish price. This changes the entire agency relationship from one where the agent acts in their client’s best interests by making every effort to talk price up and provide detailed market evidence to justify the seller’s price expectation, to one where an under-bidder sets the price after just a 3 week marketing campaign. That just doesn’t seem right!
11. Here’s how auction agents establish price. The auction reserve is usually set just prior to auction based on ‘feedback’ from potential buyers. To get this feedback the agent asks potential buyers what they think the property is worth. How many buyers do you think are going to give a high figure? This is called property seller ‘conditioning’ in the industry which to my mind contravenes the agent’s contractual duty to the client.
12. Many properties get passed in with either no bidders present or no bids from potential buyers who are present. What impact do you think the knowledge that there were no auction bids or bidders is going to have on the property seller’s ability to achieve a good price post auction? In these circumstances the auction process has likely established a maximum price level in a very public domain beyond which potential buyers are then unlikely to go.
So when is auction appropriate? In my view property auctions are OK in the following circumstances:
1. Where the property in question is patently in demand and there are a quantified number of potential bidders.
2. Where the property seller is under severe time pressure or financial duress.
Even under these conditions however there is no guarantee that sale by auction will yield a better price than sale by private treaty or even a tender.
Nigel,
Congratulations, a fair and well balanced summary of auction from someone who has clearly been around for a while and has conducted many auctions (have you?). It seems you really know your stuff. I’m sure you’ll agree, however, that we live in a changing world where it’s impossible for everyone (including myself) to keep up with every change.
In my world, the way auctions are conducted has changed quite a bit compared to the world you describe above. I do remember in the late 90s/early 2000s conducting auctions in a similar way to your description, but thank goodness for change.
For example your 4th, 5th & 8th points are incorrect in my world. And that flows through to nullify your 10th point. Your 11th point regarding setting the reserve is way off the mark too. The only feedback my vendors and I want is a written offer, all else is just noise and dismissed as exactly that.
For these reasons (plus many more) this is why my vendors and myself are so comfortable and confident to auction.
My last 5 auctions have all had no less than 5 bidders and all sold well. Some sold before auction, some after. My buyers don’t seem to care how much a property passes in for. The ones who do, generally aren’t real buyers. I’ve seen auctions pass in for $500,000 then sell for $1million afterwards. When you don’t allow dummy/vendor bids, that’s a common occurrence.
Things have changed. In the past, some aspects of auctions may have been questionable and you have those points very well above. But now, if they’re correctly handled, in my market, auction is often (not always) the only way to go.
Nigel has a book called Truth, Lies and Real Estate the link to his name goes to http://www.truthliesandrealestate.com/
Neil Jenman also has a lot to say about auction at http://www.jenman.com.au/BS_S_Auctions.php
He says among other things:
“Never mind what agents tell you, never mind what you read in the papers, auctions are a financial minefield for consumers.
Despite the booms in many areas, thousands of homesellers are turning their backs on auction and benefiting. But there are still thousands of sellers who don’t realise, until it’s too late, what happens to them at auction.
They get a LOWER price, that’s what happens.”
I have purchased several properties at auction. One I had valued prior at $410,000. I was prepared to go to $400,0000 but couldn’t believe my luck when the owner capitulated, reduced the reserve and I secured it for $366,500.
Another I resold soon after buying at an auction for $42,000 more than I had purchased it for!
So buying at auction is great but I would not sell one of my properties by auction.
Steve. I’m not anti auction – just the way they are automatically ’sold’ to property sellers with no attempt to rationalise the pros and cons of the available options.
If you rationalise the various approaches with your clients (i.e. provide them with a written agency proposal outlining all the selling options available and the pros and cons of each) in relation to their specific objectives and property – then great.
Out of interest, my point 11 is based on written material distributed to prospective buyers pre-auction by one of the most successful franchise agencies in NZ. They definitely do it.
It nevers ceases to amaze me how cynical people are about Real Estate and especially Auctions. I don’t beleive any marketing method is inherently bad if the vendor is made aware of the pro’s and con’s and make an adult (informed) decision.
I believe Auction is a marketing tool that most closely aligns with motivated vendors and demands concentrated attention from ethical well-trained salespeople to work well.
Read into that what you will
I also believe the Wild West days of Real Estate are behind us or soon will be…
I’m still surprised that we don’t yet publish transparent results in the format that is now commonplace all over Australia. If verifiable results last week show that success at auction is near 90 percent (in VIC) then why can’t the same be done here?
Then as it shows over there in Oz, some states have great success while others don’t, just as certain towns / cities in NZ would reflect equivalent scenearios.
Now thats information that I think a prspective vendor would want to know before making their choice.
“demands concentrated attention from ethical well-trained salespeople to work well”.
How long is the training for a real estate agent/salesperson?
Good point Andrew, when you compare my hours and earnings with the average, there’s no question the course to become an agent should be a solid 3 or 4 year university degree with a strong focus on psychology & business studies.
Couldn’t agree more Steve! Not only hours and earnings but responsibility and importance of the job also.
Russell,
I too like buying at auctions where the listing agent doesn’t know how to protect the vendor from bargain hunters. Bring it on!
Auctions have a couple of benefits for vendors/agents not discussed (I’ll leave you to decide who’s the beneficiary):
- buyers have to (should) spend money before bidding, making sure what they know they’re bidding on. Despite the relatively small quantity of money, it adds to their commitment
- buyers have to pay-up on a short timetable —> auctions beget more auctions as cash buyers on a timetable create further cash buyers.
Auctions create a sense of urgency for potential buyers and are an ideal means of conditioning them to the bargain they could possible receive the property for. Auctions are an ideal vehicle for an agent to lower seller price expectations based on often limited (small sample and timeframe) market feedback and lack of interest or low bids on the auction day. This combination gets sales.
In summary, better for the purchaser than the vendor. Ironic that so many agents who are supposedly acting in the vendors best interest recommend this option. This recommendation is accepted by the majority of vendors because if you dont have faith in the professional you hired, why did you bother.
Andrew,
You might know what you’re talking about in an area that you’re skilled in, but when it comes to property auctions, I don’t think you’re the expert. Or are you? Have you conducted lots of auctions, or studied them in depth for years, or learnt from the best auction practitioners available?
Your statement “In summary, better for the purchaser than the vendor” is like me saying “the USA printing money is going to cause massive inflation”. I’m not an economist, never will be, and my inflation prediction is pure speculation from a naive and uneducated point of view. Just like yours above.
Consumers have choice in everything. They can pick a bad agent. They can pick a good one. They can pick a bad investment adviser, they can pick a good one. Picking a good person to help you on a professional level takes time and effort, but the rewards are there for those who understand what is already common sense to many. In the end it boils down to self responsibility.
I know I won’t change your mind about auctions, you seem to, like many, have unswerving distrust of them. I have two auctions at B&T in Auckland City (level 4, 50 Kitchener St) this Wednesday at 11am. Come along and tell me afterwards if you think the vendors were hard done by or were under pressure to sell below their reserve. Tell me if the buyers who buy both properties think they got a bargain. I’ll introduce you to all 4 buyers and sellers them and you can ask them yourself. After this yet to unfold experience I challenge you to get back online and write about the experience. Let everyone observing this exchange know whether your views on auction have changed or not. Up for it?
Some very interesting interchanges which for me certainly demonstrate that this marketing approach to property sales has strongly held opinions – both fore and against.
I have no personal experience as I have neither bought or sold at auction for all of the properties I have owned.
I however found it amazingly conincidental that whilst at the University of Auckland Business School Department of Property yesterday I picked up a copy a recent newsletter with the following article:
Agents do adjust appraisals, says expert
Professor Simon Stevenson of City University London working with Department of Property Lecturer James Young tested for differences in the guide pricing process for auctioned and private treaty sales in Dublin, Ireland over the period of 1997-2004.
“We tested the hypothesis that agents use different criteria in preparing the guide price for auctioned housing, with an element of under-pricing in order to aid in the marketing of the property,” he told the seminar. “We found that the evidence is consistent with the hypothesis that agents do adjust appraisals for auctions to attract additional potential bidders.”
Now I share this purely for information – not in anyway making a statement of support, I also note that this is research from Ireland and research for 1997 to 2004 – never the less interesting. On further research I did find the actual paper on this. The abstract of the paper is very interesting as it says:
“This study examines the relationship between guide and sale prices for residential properties in Greater Dublin during the recent housing boom.
The results indicate that degrees of divergence can be present, auctioned properties tend to sell more frequently at a premium to their guide price and that the average level of premium is also higher. These findings are confirmed by econometric analysis.
It is proposed that the two potential causes behind this mis-pricing are the speculative boom in the Dublin market during the period and the possibility that agents build into auction guide prices an element of underpricing in order to increase interest in the properties on the market”
So in someways the issue was not so much under-pricing the guide price as “over-inflating” the premium to guide price success!!
Thanks Alistair, good stuff.
When I first started doing auctions the philosophy taught was “quote it low, watch it go”. I think the general public is pretty wise to this practice and usually build in a factor after asking the agent for a guide.
I’m a little different. I try not to guide (sometimes I have to for migrants with poor english). I ask buyers if they’re “comfortable” buying above a certain figure, then if they are I suggest they have a look. Believe it or not I actually want to help them, not mislead them. My biggest fear in “guiding” is that someone loves the house, thinks it will sell higher than it does, doesn’t come to auction, misses out on a reasonable buy, and the vendor suffers too because that buyer wasn’t there. I’ll talk more about this soon but I have 2 kids crawling all over me…yikes.
The pressure to drop price expectations doesn’t necessarily have to come from the agent; it is the auction process itself which creates it (unless there is real demand for the property). Don’t underestimate the psychological impact on vendors of little apparent interest in the property on auction day, after 4 weeks of build up. No wonder many sales are successfully negotiated soon after the auction.
“Pure speculation from a naïve and uneducated point of view, just like yours above”. Now there’s an assumption based on very little information Steve. Re: challenge, it would require an international airfare an prove nothing.
Touche Andrew I should have known you were in this industry but outside NZ.
Thursday I’m going to update this blog with full details of buyer/seller expectations (within the bounds of not upsetting anyone) and my dialogue with buyers/sellers leading up to my two auctions Wednesday. They might sell, they might not. Might get bids, might not. Stay tuned for a warts and all tell-all.
Be great if NZ industry could produce a list like this every week:
http://www.homepriceguide.com.au/saturday_auction_results/melbourne_domain.pdf
and an interesting added feature would be the reserve price.
Ross,
Simple question.
1. Do you keep a record of this in your database for every property?
2. If we provided the medium would you provide the data?
3. How many other agents would support this initiative in providing the data?
“The pressure to drop price expectations doesn’t necessarily have to come from the agent; it is the auction process itself which creates it”
Auctions aren’t right for every owner. If an owner is happy to sit and wait for months to achieve a certain price then yes, they might as well price the house. They shouldn’t auction. Also, if they are willing to accept that by pricing they may lose a few thousand compared to an auction price, so be it.
Auctions are great for sellers who are working to a specific timeframe with a clear focus. They’re for people who live in the real world, knowing that last month the market might have paid $1mil for their house at auction, this month $950,000 and next month $1,050,000.
It depends entirely on who is in the market to buy during the auction program, how deep their pockets are and how emotionally attached they have become as the hammer falls.
The data shown for melbourne is pretty useless as data without knowing age, condition of structure, Rateable Value. etc,.
If we want to be transparent about auctions we need to know was it sold at the original ‘conditioned’ reserve price or above. This will mean that the vendor had got a price they were reasonably happy about.
Some properties are sold after the vendor is talked into lowering the reserve price to match the highest bid under the reserve and or the bidder agrees raises his bid to match the vendors lowered reserve. So we need a tick box for original reserve met.
Adding the reserve price to auction stats won’t prove anything. If I was selling my own home I’d set the reserve $100k above what I want and review it during the auction. The definition of reserve price has changed over the years, hence it’s uselessness as a benchmark.
This from the Herald on Sunday via Bernard Hickey at http://www.interest.co.nz -
“John Wills, sales head for Custom Residential, said one Grey Lynn “do-up” attracted five unconditional offers after the first weekend of open homes and sold for $640,000 – around $50,000 above the vendor’s expectations. ”That’s right in the sweet spot for that type of entry level. It was going to auction, but it didn’t last past the first week.”
He said the “acute” listings shortage has reached “crisis” levels from the buyers’ points of view. “These buyers are tired, they’re frustrated and they’re over it – they just want a house and to get back to a normal life.”
Steve Koerber opinion – why oh why would you sell a house in this environment via any method other than auction? Why oh why would you also not wait for another 2 weekends to gather more competition and get a higher price?
Come on real estate salepeople! We get paid a reasonable fee to add value to the selling process. If we fail to add significant value to the process, people might as well sell privately and save the fee. Anyone can sell in a hot market. Add value!
Steve,
I don’t know exactly the situation you describe as I didn’t read the article nor do I know the property – but in response to your call for us to add value – I believe our process caters well for this sort of situation.
Should a buyer wish to make a pre-auction offer, we will obviously present it, but we insist that it remains open for at least 48 hours. Should it be acceptable to the owners, we will contact everyone who has expressed an interest – should any one of those parties wish to make an offer, we bring the auction forward and the original offer price becomes the opening bid.
We had just such an occurrence in our rooms yesterday.
Pre-auction offer of $435,000 – auction brought forward – eventual selling price $480,000.
I would say we added value!
Thanks Tim, agree you added value and your process is proven. Thanks for sharing it. For genuine seller’s agents like yourself I’m suggesting (for hot properties) – “will not be sold prior”.
Warts and all 1:
Seller asked me to appraise a do-up apartment with seaviews, deceased estate. Seller had been offered privately verbally around $500,000 (conditional) from a neighbour. CV was $465,000. My approach was to strongly recommend auction. No promises given about pricing other than to indicate optimism that $500,000 plus was possible if the right buyers were invited to compete for the property. If they weren’t, the sale price could be under $500,000. If the neighbour was genuinely interested I recommended they join with others in the fight to own it. The neighbour didn’t attend auction and didn’t bid.
Three week auction campaign, NOT to be sold prior. Brisk enquiry and busy open homes. My response to price guide questions was tell people the CV of $465,000. It was the only price related fact I knew. As excitement grew and bidders stacked up, potential bidders asked “what’s your guess Steve”. Privately my guess was just as I had explained to the seller before listing, publicly my stance was that I only deal in facts. I explained to most who asked that there appeared to be strong interest from several parties around CV level. This was factual. Several told me that $500,000 was too much. Too much work to be done to the property for it to be worth that. Nobody had indicated or offered higher figures than the CV.
Auction saw 9 registered bidders in the room, about 4 or 5 actually bid. Bids started at $300,000, quiclky rose in $10,000 lots to $480,000. Slowed around $500,000, down to 3 bidders. At $530,000 down to 2 bidders. At $531,000 down to last bidder. I checked the room to ensure all bidders were finished other than the highest. We talked to last bidder and gently suggested an increased bid above $550,000. This met with resistance. We negotiated higher, got an increased bid of $535,000, then after a few minutes a final reluctant bid at $537,500. Owner agreed to put on the market at that level, having seen that all other bidder’s limits had been exceeded AND the under-bidders limit had been exceeded by $7,500. It was likley that no-one in the room was likely to pay more. By putting it on the market at that point, if another bidder had materialised, the bidding would have gone higher, but that didn’t happen, all other bidder’s limits had been exceeded.
The happy seller sold at $537,500. During the 3 week period he chose to market, he could see very clearly that the market had been tested, extracted and stretched to its limit. The sale price exceeded the seller’s “hope” figure and he was well pleased with his “in hand” amount achieved.
The buyer was happy in the knowledge that he had secured a popular property that is likely to be popular again if he ever decides to sell it. The other bidders were naturally disappointed but several commented that the seller would obviously be very happy with the result.
Warts and all #2 coming soon.
Steve
Appreciate as I am sure many others will do the real scenario description of the process and outcome – kind of makes me think you should write a new blog called “warts ‘n all – the everyday life of a real estate professional”!!
This property was clearly in demand, hense a good outcome for the vendor and a good choice to go to Auction.
Under which circumstances is it unwise to choose an auction as the way of selling your house?
Andrew, good question thanks. If a house is clearly worth $500,000 and a vendor won’t ever accept (eg) under $650,000 then an auction will only ever be a “market survey” in this scenario. I do plenty of auctions that become market surveys. Why do that? I suppose because sellers often change their minds. If the survey is a particularly thorough one, sometimes a seller will realise that, then accept real value.
I acknowledge that a market survey is tough on buyers. I don’t think this can be changed. I can’t exactly say to buyers that the seller wants $650,000 and won’t accept less. The reason I can’t is because, as I’ve said, they might change their mind!
When I sit with potential sellers I assess whether or not they’re likely to be able to take the stress of an auction and whether or not we’re likely to get 2 or more bidders. If they don’t tick those boxes we generally don’t auction.
My view is that a Tender is a great way to deal with a house that’s totally unique (like a castle shaped house), because 1 buyer might think it’s worth $1mil and the masses think it’s so ghastly that it’s only worth $600,000. An auction is good for most other houses, as I’ve said, if done properly it establishes the highest value within a limited timeframe. Even with one bidder, that bidder can be encouraged to bid to their max (often but not always).
Warts and all 2 will appear in my blog when I get a chance to write. Sold with multiple bidders, vendor/buyer happy.