A Melbourne-based agent has highlighted the value of an auction strategy over private treaty when it comes to commercial sales, saying it leads to faster turnaround times for properties while boosting sale prices.
Ray White Commercial Ferntree Gully sales and leasing executive Mitch Rosam said that, in his experience, auctions gave clients the best chance to get a good result through creating direct competition on the day.
“By getting all potential buyers in one location and making them compete to buy the property, it gives my vendors the best chance to achieve the highest sale price,” Mr Rosam said.
“Auction creates competition by getting interested buyers on site at one time and makes them make a decision about buying the property.”
Mr Rosam said the urgency created by the auction process meant properties sold at auction were on the market for significantly shorter periods of time.
“The average days on the market for auction at the moment is around 30–40 days, while the average days on the market for a private sale is around 100 days,” he said.
“The main difference with auction is it gives buyers the chance to actually see in the flesh that other people want the property, and that realisation brings to life that auction is your only shot to secure the asset.”
Mr Rosam gave the example of a recent property he had sold in the south-east Melbourne suburb of Belgrave which had previously languished unsold for several months.
“This property was on the market as a private sale for nine months with other local agents, but once I listed it at auction, we were able to achieve a sale price of $866,000 within five weeks,” he said.
“Auction is proving to be a faster method to sell property and for a better price for the vendor, so who wouldn’t want to choose a more successful way, given the chance?”