This year we continue to see more and more homeowners opting to sell their property by way of auction we take a look at why auctions have become so popular.
It is pretty clear to see why so many sellers are opting to auction their properties, particularly in Australia’s two largest markets of Sydney and Melbourne.
When neighbours, friends and family tell stories of sales twenty or fifty thousand dollars above their expectations others want to follow in their footsteps, to roll the dice with an auction in hopes of a higher sale price.
At extreme levels we are seeing some properties selling for over half a million dollars above reserve prices.
Which for a live in owner is pure profit, tax free on the sale of a principal residence, it’s basically a cash profit.
In some cases incredible gains of two or three hundred thousand dollars have been made within two or three years.
Now think about trying to save one hundred thousand dollars cash a year, for most people this would be impossible.
Yet with record low interest rates and fierce competition for property auctions are helping many vendors cash in, in a very big way.
Media exposure around auctions from newspapers, to television programs and news reports are all giving coverage of what is the most public of negotiations of property sales.
Auctions can be tracked and monitored with clearance rates regularly reported upon and market analysts consistently commenting on auction activity.
Auctions give live data and statistics for property spectators to scrutinize as it happens.
This constant spotlight on auction draws more and more attention from the public.
Australians love the battler having a win , live theatre, the great Australian dream of home ownership, having a punt, good fair competition and auctions provide all of this and a lot more.
Benefits of auction to a seller:
- Set time frame
- Unconditional sale (no cooling off period)
- Creates competition from buyers
- Greater exposure to more buyers
- No price limit or cap on price
- Best opportunity to secure a premium sale
- Price is negotiated upwards
- Protected by a reserve price
- Competitive bidding can drive price up
- Set inspection times
- Sale is made on vendors terms (e.g. settlement date, deposit amount)
- Transparent and fair to buyers
- Auction day is a public negotiation and the fear of loss and missing out can often drive emotive buyers to pay more to secure their dream home at auction.
Traditionally private treaty or fixed price sale has been more commonly used to sell residential property, other methods of sale such tender, expressions of interest can be used however are a lot less common.
Auctions have been around for thousands of years and will continue to be an increasingly popular method of sale in Australia.
When home owners are selling what to them is often their most valuable asset the live negotiation of an auction can very often result in a higher sale price.
Auctions will continue to grow as our relatively young nation continues to grow in population and popularity as one of the most desirable counties to live in the world.