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The rise of auctions as selling tool

Property

The rise of auctions as selling tool

When it comes to selling property, REIQ’s Matt Diesel says success comes when you have a plan tailor made for you.

REIQ Sunshine Coast zone chair Matt Diesel says conditions relating to COVID pushed up the number of Sunshine Coast auctions until they reached about 90 per cent of property sales, leaving 10 per cent of transactions via private treaty.

He says since 2020, markets have been changing and growing weekly, and auctions are able to reflect these conditions. But ultimately, auctions are another tool in the agent’s toolbox and should be used accordingly.

There is no such thing as a “one style fit all” selling strategy, he says.

“It depends on the market and property; you need to tailor it for that property and the sellers,” Mr Diesel says. “For the seller, auctions can show the property is not under- or overpriced.”

Traditionally, auctions have been a preferred mode of selling in the southern states, but not Queensland.

Mr Diesel says this is due to their increased price transparency.

“The agents can list figures that are considered within 10 per cent of the selling price – this gives buyers more of an understanding of what they are able to purchase.

“Without that price guide, it can be trickier for buyers,” he says.

“Prospective buyers can do all the work – gaining building inspections and finance and then it can turn out to be right out of their price range and a waste of time.

“It can be very frustrating for buyers,” he adds, suggesting that making indicative selling figures available would be beneficial to buyers.

He says Queensland agents would provide a price guide until about a decade ago when a few unscrupulous agents who under-quoted prices caused the legislation to be changed and the process ceased.

“It was using a sledgehammer to fix the problem, when probably all it needed was for those agents to be fined,” he says.

As the market continues to change, Mr Diesel says the percentages between auction and private treaty sales are evening out.

Twenty years ago, Ray White Caloundra principal Andrew Garland completed his position as a banking and finance lawyer in the residential construction finance area at the law firm MinterEllison and went into real estate.

He says the first real office he worked with provided specific and expert training in property auctions. To this day, he believes that thorough training is an absolute requisite for conducting successful auctions, and auctions are the best way to sell property.

“Auctions have less days on the market and gain higher prices,” he adds.

Mr Garland conducts online auctions and recent sales include 58 Albert Street, Shelley Beach for $2,295,000 and $2.5 million for 8 Ernest Street, Kings Beach, which were record street prices.

However, he says, the agent must do the work to ensure a successful sale. ‘If the agent doesn’t have the buyers lined up, the auctioneer has no one to sell to,” he says.

THE AUCTION PROCESS

The auction process is strictly defined by legislation to ensure fairness. Legislation requires all people buying at auction to provide their names, addresses and proof of identity before bidding. This information must be provided for a bid to be accepted during an auction. The bidder will be provided with a number, which must be displayed if they make a bid during the auction.

Some tips on bidding at auction include:

  • Ensure the auctioneer can see you.
  • Hold up your bidder number and call out your bid in an audible voice.
  • There’s the option to call out an exact amount, or indicate the increment you wish to increase the previous bid by (this increment may be suggested by the auctioneer).

At the start of the auction, the auctioneer will announce if the property is to be sold with or without a reserve price. It is also important to keep to your budget during the auction because if you are the successful bidder, you will be the new owner of the property.

DISCLAIMER: The information contained above is provided for general information purposes only. The information should not be used or relied on as a substitute for legal advice. If you require legal advice concerning a specific fact or situation, you should seek independent legal advice. REIQ accepts no liability or responsibility for any loss occurring as a result of anyone acting or refraining from acting on the basis of the information contained herein. While REIQ has taken all reasonable measures to ensure that the information contained in this fact sheet is correct, REIQ gives no warranty and accepts no responsibility for the accuracy or the completeness of the information. Source: REIQ

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