Puzzle Finance Blog

If you don't sell at auction, what next?

THERE is a common misconception that if you fail to sell under the hammer, it must be a disaster.

All that pointless marketing money spent, all those open homes, all those people rummaging through your house.

And then there is the shame of hearing neighbours discussing how you clearly got so many things wrong in the renovation and the tedium and drama of keeping the place clean for open for inspections.

Obviously it was a complete and total waste of time and naturally you wish you hadn't listened to the agent who just recommended that path just to get more advertising out of you. Then there is there the public humiliation of it all, as the failed auction tells indicates no one liked your home.

 To a certain extent some of these factors are true, depending on how melodramatic you are feeling on the day. And auctions are well known causes of stress which can cause melodrama.
But if you do not sell under the hammer, let me put this into some kind of perspective. What the weekly auction clearance rates fail to cover and illustrate is just how many of these failed auction properties are actually sold within say 30 days after the event. This is one of the key questions to discuss with an agent before you consider selling using the auction method.

The key to deciding with confidence that an auction is the right way to sell your home, is to question your agent carefully. Ask them how many auction sales have they conducted with homes in a similar price and value category to yours. An agent randomly quoting data about his last 10 sales that all sold under the hammer can be potentially misleading; if all the sales were for freestanding homes around $700,000 and you have a $400,000 townhouse to sell. You need to know the true results of their most recent five to 10 sales of similar properties; how many sold under the hammer; how many sold within the following month and let that be the focus your consideration.

In life, it is a good strategy to hope for the best, but be prepared for the worst, and that's often a good way to approach an auction. You need to know prior to the auction what your game plan is:  at what point will you pass in; when will you announce your vendor bid - just in case the buyer of your home does so after the auction, not on the day.

Due to the fact that bidders must register before bidding, the registered number is a guide to the level of interest on the day, but it is only a guide.

There is always the possibility some buyer may be really keen but may not be able to bid under auction conditions, perhaps because they don't have the deposit as they have only just realised they want to buy your home and weren't expecting that to happen when they popped down the street to buy a coffee. This is quite a common situation for typical trade-up homes where people having fallen unexpectedly in love with a home, then realise they can't afford it unless they sell their own place first.

But by the time auction day comes around, both you and your agent should understand what the chances are of you selling under the hammer. If it is not strong, discuss your "passed in" figure before hand - even if it is a bit lower than you would have wished for as this can be the starting point for your ongoing marketing campaign. Remember it does have to be realistic.

Should you fail to sell on the day, find out from your agent - or look it up online - what the typical days on market is for your area and for homes like yours. If three bedroom homes are currently taking 89 days to sell and yours has only been on the market for 43, it would be unwise to panic immediately post auction.

This information will help you decide whether to continue marketing your home, but remember even this decision is only for a set period of time. That could be another month, in other markets it could be three months or more. Don't go too long. No matter how keen you are to sell, take a break a listing becomes tired and tired listings do not attract strong sale prices.

The break could be just two, or three weeks, or six months depending on your market conditions and vitally your personal circumstances. Then think about a totally fresh campaign, maybe change agents, change pictures, change write ups, your print advert style, your online presence, revive everything.

Let a new set of buyers see your home, you may even find a buyer from the previous campaign comes forward this time in a stronger position than before, especially after getting worried the home was no longer for sale. It is true that your house can be more attractive to some buyers when it plays hard to get.

Posted by Andrew Winter - News Limited Newspapers on 5th September, 2012 | Comments | Trackbacks

Bookmark and Share

The trackback URL for this page is http://www.puzzlefinance.com.au/trackback?post=26300700


There are no trackbacks for this post


There are no comments for this post

Post a Comment

HTML is not allowed in comments, http://... will be automatically linked.

Name (required):

Email Address (not displayed):

Comment (required):

To help prevent spam, please enter the word case here:

Puzzle Finance Blog

About Puzzle Finance


September 2017
August 2017
July 2017
June 2017
May 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010


Purchase or Rent (1)
The Age (1)