An auction is the rare occasion when a first owner, investor and tenant will be in the same room, vying for the same goal – to be the last with the raised hand, followed by the early launch of something. impact, which will signal that, against all odds, they have secured the property.
But whether it is inside the walls of the house for sale or in a community room where the agenda is fixed by a slideshow presenting a selection of properties, public auctions have long been admired for their competitive advantage.
As Adrian Kelly, President of the Real Estate Institute of Australia (REIA) put it, "Auctions have been used as a means to sell not only real estate, but anything since then by Julius Caesar. So the method works, if it has been around for so long. »
"Buyers have time to do a few inspections, put their finances in place, [and] do a building inspection if they wish," says Kelly.
"So there is time that you don't have with normal private treaties. Everyone is in the same boat, so it's definitely an equal playing field – apart from the price . "
In response to the global health crisis caused by COVID-19 and in the midst of a wave of restrictions on rallies, the federal government requested that all public auctions and open houses temporarily cease.
For the time being, sellers who had planned to publicly auction their properties but are not comfortable with conducting an online auction must delay the sale or transfer their properties to a treaty private.
Kelly of REIA supports the recent government decision and, in a statement, "It is not a shutdown of the real estate industry". He encouraged officers to view technology as a way to go during this time.
Taking a step back from the often exacerbated atmosphere of public auctions can also create space to look at them through a fresh, clear lens; find out what makes them effective and how to best exploit them once the current shield is raised.
Setting the date: why are auctions held on weekends?
Hosting an auction on a Saturday largely comes down to the convenience it offers buyers, says Kelly of REIA.
"People generally work from Monday to Friday. On weekdays, there are not as many people who show up, especially those who want to be there but can't, "he explains.
"It is common for us to organize auctions on Friday also because many people can be away from work for about an hour, but it is much more difficult from Monday to Thursday."
However, the magnetic effects and the emotional hold of real estate also come into play. Kelly says that if someone invests to become a property owner, "he will be there », Regardless of the day of the week on which it is planned to leave the market.
Create the atmosphere: choose the right place
Another questionable difference lies in the configuration: organize the auction at the property or line it up with a handful of other properties at an outdoor location and surround yourself- Do you potentially have more buyers?
"I have a personal opinion that holding an auction outside the facade of the property you are selling is more beneficial in terms of atmosphere than to sit in a conference room, "shares Kelly.
But by saying this, he also highlights the advantages of grouping several properties that will be auctioned consecutively in the same room.
On some occasions, up to 20 properties may be displayed. This not only means that potential buyers who miss a property can skip the next one, but it also exposes sellers to the concentrated attention of a larger buying pool.
"If you are a potential buyer and you have your eye on more than one property, if you miss one, then you can just sit in the room and wait for the next one to arrive" , Kelly explains.
However, he adds that it comes down to quality over quantity and says: "There is no point in having a hundred people go to an auction and there are only two to three bidders. "
Kelly suggests that a seller prefer to have a smaller number of people present, say 10, but who are all bidders – as would generally be the case if the auction took place on the premises of the property.
Gathering a team: how can a real estate agent help?
Putting a property up for sale – whether through a private agreement or a public auction – means cluttering up some professionals who have done it many times before and who know how to what to expect from the process.
But with the costs involved in selling a property, how should you expect a real estate agent to guide you along the way and increase your chances of sweeping a profitable bottom line?
Cate Bakos, President of the Real Estate Buyers Agents & Association (REBAA), shares the fact that the real estate agent or seller, as well as his team, "will coordinate marketing, advertising and will be open to inspections ”.
This includes "recommendations to present the property in its best light and coordinate photographers, editors, drones, trades, gardeners and [home] stylists", shares Bakos.
She said that by executing these integral elements, the real estate agent "will adapt or adjust the campaign as it should be adjusted to allow the best result on the day of the auction".
In addition, they will have to respond to all cases in which an advance offer is submitted, and if the seller still decides to proceed with an auction, Bakos explains that "the agent will have to manage the preparation of the contract by the legal professionals, and will need to ensure that sellers are ready for the auction. "
Bakos says: "By the time the auction is in a few days, the agent should have a good idea of ??who the likely buyers are, what value they see in the property, what other properties to sell in the same area are competing, what expectations sellers have as a result of their consistent feedback from buyers, [as well as] the likely manner in which the auction is taking place and any issues they may have to resolve. »
In addition to hosting the auction and explaining the conditions of sale to the bidders, the real estate agent will also be responsible for "coordinating the signing and execution of contracts Bakos adds.
