Post auction passed in tips for buyers as the pendulum starts to swing from sellers' market to buyers' market

Post auction passed in tips for buyers as the pendulum starts to swing from sellers' market to buyers' market
Post auction passed in tips for buyers as the pendulum starts to swing from sellers' market to buyers' market

The pendulum is swinging from sellers' market to buyers' market.

But don't be in any doubt the most powerful opportunity of putting sellers and motivated buyers together at the moment is still at auction. 

That is despite the significant decline in weekend clearance rates over the past four months.

With regions across Sydney nearing amazing 90% levels in May, Sydney's overall under the hammer success rate now comfortably sits in the low 70s, according to CoreLogic RP Data, probably heading into high 60 percents. 

Those record October auction volumes are putting further oversupply pressures on the auction market - close to 1000 next weekend.

Other than those inconveninced vendors who have to tensely await buyer post-auction offers, there is nothing demoralising about the recent trend.

Indeed there's plenty of reason to welcome a bit of rational normality.

There was way too much silly exuberance - with a buy at any cost herd mentality earlier this year. 

That was understandably creating those headlines of a property bubble, and the dire predictions of a looming property crash.

We were never really ever quite there, but RBA Governor Glenn Stevens wasn't wrong when he said he was seeing crazy prizes.

Now with the air leaking out of that so-called 2015 bubble, and price growth being tamed, many more of weekend auctions are being passed in.

Be aware the most common time for a sale deal to be done after a pass-in is later that day, if the asking price is not crazy.

So think about putting yourself in the box seat with the highest offer to the auctioneer and be sure to hover post-auction rather than risk hearing Monday morning that someone else bought it that weekend.

I suggest during the auction it is important that you watch just how many bidding competitors does the agent seek out to solicit bids.

Especially be aware if it is just you.

If there are no other buyers in sight and everybody has left, quickly re-assess how much you’re willing to counter-offer above the vendor bid or highest bid. 

Don’t be frightened to drive a hard bargain, but be aware negotiating on a property is all about balancing the risks of over paying or missing out altogether.

Yes you might run the risk of paying more than you needed to, but sometimes focusing on paying a lower price for a home might raise the risk that another buyer trumps you even in this softening market.

Auctioneer Damien Cooley recently put an Alexandria property to auction with a $1.1 million reserve.

After two bids starting at $1 million, there was a vendor's bid at $1.070 million at which it was passed in. After that Saturday auction, new buyers went through the home with the property exchanging to one at $1,151,500.

"It’s a good example of how in the market right now there are buyers that feel things are changing and are getting very hard and fast in the way they are negotiating the deal," Damien Cooley suggested.

"Saying things like “this is the market”, “I'm not paying any more”, “sell it to me or I’ll walk away."

"There is a lot of frustration coming out at auctions and negative comments being directed to agents and auctioneers.

"The buyers are entitled to hold their position, however in this case I feel the buyers really wanted this house and unfortunately as a result of playing too hard missed out on the property.

This article was first published in the Saturday Daily Telegraph.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.


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