Attending an auction soon, or just interested in the process? We recently conducted a Q&A with Justin Marsden, the Head of Auctions, Queensland, for McGrath Estate Agents. He has generously given us his expert opinion on all things auctions. Read on to learn from one of the industry’s best!
Q: Why do you recommend the auction method?
A: There is an endless list of reasons why I would recommend the auction method. Not only does it achieve a premium price, generally they have a higher impact advertising campaign and a more structured selling plan. Another major benefit is that there is no price capping. This means there is no ceiling placed on the amount that the property can be sold for. Furthermore, it creates a sense of urgency with a defined date for the sale, this encourages buyers to make decisions faster. This is reflected in the fact that the days on market are often reduced by around half when you choose an auction campaign.
Q: What are the key advantages?
A: The prospect of bidding at auction can seem daunting. But it’s the fairest and most transparent forum for both buyer and seller. The benefits for both parties are derived from the immediately unconditional contract of sale at the conclusion of the auction. The successful purchaser accepts they have waived the cooling off provision and the purchase is not subject to any further terms i.e. finance approval or buyer inspection clauses.
The key benefit for the seller is that there is virtually no chance of the contract not proceeding – it’s a guaranteed sale. Many sellers would prefer to accept a fair price on auction day than delay the sale waiting for a conditional offer. The danger of failing to bid and buy at auction is that the auction playing field is no longer level afterwards. Post auction negotiations can become challenging – if multiple offers are presented post auction you can’t see your competitions offer and may you miss the opportunity to negotiate.
Q: Why do auctions work so well? Particularly in the Wilston, Windsor and Grange areas?
A: Buyers like the fact that it is an open and transparent negotiation happening right in front of them. There is also the fact that people/neighbours are interested in what is happening with property in the area and many even just attend auctions as a spectator to keep informed about the sales occurring in the market. It’s becoming a little bit like pop-culture around these popular suburbs.
Q: How can buyers put their best foot forward on auction day?
A: Firstly, project confidence and have a bidding strategy. Communicate with the agent and ask questions. Do bid! Make yourself known to the auctioneer. It can be good to start the bidding. Call out your offer in full, so say “$350,000” instead of increments like “$5,000” and make sure to stick to your walk away price. Short-lived disappointment is better than long-lasting remorse. If you miss out, accept that it wasn’t meant to be and look forward to finding something better soon. Don’t forget to stay in touch with the agent as they frequently have other homes they can show you, both on and off market.
Q: What would you say to a seller who is nervous about using auction as the method of sale?
A: That we are experts in the skill of managing the auction process. You are in safe hands, let us help navigate the selling process with you. McGrath alone are known for the some of the country’s most premium property sales, a lot of them through the bespoke auction method.
Q: What are the key things that buyers need to do to get themselves ready for auction day?
A: They should advise their financier that they intend to bid as they may require a valuation prior to the auction. Consider getting pre-registered to save time or confusion on the day. Make sure they know what the settlement date or time is. As a buyer – are you able to attend? Do you need someone to bid for you? We can always help make this process easy, just give us some notice in advance!
Q: When would you not recommend an auction to a seller?
A: If they don’t want to sell their house and they are just testing the waters.
Thank you for your time Justin, your answers have been incredibly useful in strengthening our understanding of how to best prepare for an auction.