One bidder auctions need special estate agent negotiating skills

One bidder auctions need special estate agent negotiating skills
One bidder auctions need special estate agent negotiating skills

The biggest dread among vendors going to auction is that their property will be passed in on auction day.

With auction clearance rates now in the 50 percent range, and even lower in some suburbs, this is a very real likelihood.

Selling at a fair market value - or better - is often dependent on the extent of buyer numbers and enthusiasm.

One bidder auctions have become far more prevalent, as vendors lose their grip on being able to secure above reserve outcomes at their auctions across Sydney every Saturday.

There's a special negotiating skill needed for the listing agent to immediately secure a sale in such onsite circumstances.

Ofcourse the agent can knock heads together during the auction, but that will take a bit of give and take from both vendor and buyer.

Vendors certainly need to anticipate this possibility.

But should vendors accept the price drop on offer from the only buyer at the auction or are they best holding off selling until later Saturday afternoon or sometime in the next week.

It all depends on the level of actual and perceived buyer interest, starting from the number of contracts that have been issued in the run up to the auction.

Agents need to follow all their potential buyers closely, and keep their vendors in the loop.

An emerging factor has been that bank finance approvals are slower and harder to get, and many buyers are finding just days before the auction that they need to lodge more information before safely securing finance.

They necessarily sit out the auction. 

This has come about as the financial regulators and the royal commission have frightened the banks so that they are dotting all the i's and crossing every t.

Coming together for post-auction negotiations is a skill that some agents need if their vendors aren't going to sell for far less than they wish.

The biggest myth about properties that sell after auction is that they go on to sell for a poor price.

That is not the case, veteran estate agent John McGrath recently noted given that fresh buyers are coming into the market every week.

The recent clearance rate downturn has likely undermined the benefits many see in a sale by auction which typically come with the potential for a premium sale price.

Unmotivated sellers rarely auction their properties.

Stuart Benson at Benson Auctions noted at a recent auctioneers' round table that his clearance rate in north west Sydney was down by 15 percent, but after six weeks on the market the sales sat around 90 percent.

Following any post auction campaign that doesn't end in a sale, it is important vendors respond to the issues that possibly caused it.

Best relook at price, presentation and/or marketing), and there is no reason to think it property won’t sell.

This article was first published in the 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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