In May 2018, Australian auction clearance rates fell again, hitting levels not seen since early 2013.
Brisbane, usually behind our southern neighbours in clearance rates at the best of times, recorded a dismal new low of 33.6%. Despite a brief peak (still only around the 50% mark), rates remain stubbornly low in Brisbane, currently sitting around 40%.
Why do so many agents keep insisting on auctions when the results are clearly not there?
Greg Turner, Real Estate Author and blogger, explains that many agents push the auction agenda for their own purposes, leaving vendors out of pocket and still on the market. “Many big brand agents will push hard for you to auction your property, unfortunately some of the time they are pushing you to do it because it’s in their best interest to sell your property via auction.”
Greg expands by suggesting that shorter campaigns, cash unconditional sales and expensive marketing campaigns (with high exposure for the agency) are governing the agenda. Auctions are all about the agent and the agency, not the vendors.
The Silent Alternative
Mario Lattanzi, our principal, says, “Traditional auctions are stressful and largely ineffective. In Brisbane, the auction clearance rate fluctuates around the 40% mark. That means that more than half of properties fail to sell on the day of auction”.
Clark Real Estate is a leading advocate of the Silent Auction, where buyers place their best and final offer on a property without knowing how much competing buyers have offered. All offers are then presented to the sellers by the agent.
Mario explains; “A Silent Auction is an auction bidding process whereby the negotiations are undertaken by the agent and the buyer without any disclosure (in price) of any competing offers to any other buyers that are bidding on the property.”
In short, bidders are encouraged to put forward their best offer without knowing what other parties are offering, raising the likelihood of buyers opting to disclose their maximum offer.
But what is a Silent Auction?
Have you ever been to a school charity event and participated in a Silent Auction? The concept is exactly the same. When two or more purchasers are competing for the same property, they can do so, knowing they need to put their best price forward if they want to secure the property. Mario Lattanzi asks this question to his buyers “At what prices are you willing to walk away from this property? That is the price that you need to put down in order to secure it.” Mario says it comes down to the walk away price more in a highly competitive environment. He instructs buyers to really think about how much the home means to them. “To the point where if someone offers a dollar more, you’re happy for them to have it.”
If you would like to discuss the unique selling aspects of your home, please do not hesitate to contact us at Clark Real Estate on 07 3256 1600.