“Auctions are fun. As long as you are not involved in them” was a quote from a vendor I spoke to recently. Yes, as entertainment value they hold all the ingredients…. drama, suspense, emotion. But, when it comes to selling our most important asset – our home, drama and suspense and anxiety are not really welcome.
Rich Harvey, president of the Real Estate Buyer’s Agents Association of Australia, said many people of all ages did not like auctions because “it’s a pressure cooker environment and emotions are running high”.
The latest Auction Clearance Rates from last weekend, according to realesate.com has Queensland at 45%. This means 55% of owners are feeling pretty stressed out right now.
So what is the solution?
Clark Real Estate is one a very few agencies that advocates and participates in “Silent Auctions”. The success of this process obviously depends on the competency of the agent and the right circumstance.
How does a Silent Auction Work?
Peter O’Malley, author of ‘Real Estate Uncovered” and a pioneer of the Silent Auction Process says “Silent auctions are a closed bidding process. While we like the fact that an appropriately used deadline can put pressure on the buyers, we know that when one buyer knows they’re in competition with several other buyers, that will drive their energy and their fear of missing out towards the subject property. One of the things that I like about the silent auction is that each party needs to produce their best, highest and final offer without ever knowing what any of the other bids are.”
He goes on to explain how vendors often do not reach the maximum prices in Public Auctions as the buyers had no necessary need to go there.
“A public auction sells to the highest bidder above the reserve price. It is common for the highest bidder to win an auction merely by beating the second highest bidder by $1000. The tragedy, from the seller’s point of view, is that the person who just bought the property often has $50,000 or $100,000 left in their budget that they did not need to spend to win the public auction. They did not need to go to their maximum price because the process did not demand it of them.
The objective of the silent auction is to elicit each and every buyer’s maximum price for the subject property.”
The practice of Silent Auctions is something we will be exploring more in depth with our followers and will continue to advocate to our vendors, should the property be suitable.
If you would like more information regarding Silent Auctions or selling in general, get in touch with Clark Real Estate today! Our real estate agents can talk you through a more stress free and more profitable process of selling.