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The strategy of collecting similar properties into a super sales event has been paying off for one network’s offices.
According to LJ Hooker, large in-room super auction events are proving to be a successful sales strategy during the spring season, serving to build sales momentum and encourage confidence among buyers.
A number of offices within the real estate network have undertaken auction events with surprising results.
LJ Hooker Padstow reported that it was standing-room only at one such in-room event that saw 14 properties hit the block. The southwest Sydney agency recorded 11 successful sales out of that evening, netting a total value of $14.5 million for its vendors.
“We had almost a couple of hundred people in the room – it was absolutely packed – we didn’t anticipate so many would turn up on the night,” said the agency’s principal, Lush Pillay.
The office could be looking to do more bulk sales in future, seeing how the strategy serves to bolster buyers’ bullishness.
“There was great energy in the room, and this gave people the confidence to bid. The impact of interest rate rises was in the back of our minds, also in the owner’s minds, but the people who presented themselves were definitely keen to buy and had their finance approved,” he said.
LJ Hooker’s network performance manager, Paul Moore, noted there are a number of advantages to in-room auctions, including mitigating bad weather or avoiding noisy neighbours.
“Another upside is that it keeps Saturdays free for open homes as you can physically only do about eight per day – so if you have two auctions on then straight away two of those slots are gone,” Mr Moore said.
“There is also potential for someone who misses out on one property to bid on another property on the rebound. While it is not a regular occurrence, this happens more often than people would believe,” he added.
That being said, there are benefits to onsite auctions that should be carefully weighed when taking the sale to a separate location.
Onsite auctions give buyers the opportunity to take one final look around the property, solidifying potential buyer’s attachment to the property. It also offers agents a valuable opportunity to network with neighbours, who could easily turn into clients.
In Mr Moore’s view, the decision on where to hold an auction should be determined by the property at hand.
“Some agents think it has to be one or the other, but there are advantages to both types of auctions and it can be dependent on the property.”
LJ Hooker Kingscliff is no stranger to the strategy behind hosting in-room auctions. They cap in-house auctions to 10 properties per event and often list properties at a similar price and with comparable features, just in case they can tempt a buyer who missed out earlier in the evening.
The agency also puts effort into making sure it’s a fun event, hosting the sales at the local bowling club, with a DJ, food and beverages to liven the mood.
According to Kingscliff agent Nick Witheriff, buyers also report that the usual nerves of auction day are somewhat alleviated by the in-room format.
“If a property only has two or three bidders, then it doesn’t put them out in front of a large crowd like at a standard auction. Being an in-room event shadows any nerves and allows people to go a little under the radar because there are a lot of people bidding on various properties, it is not as obvious as to who making the offer, so they don’t feel so isolated,” he said.
So far, the strategy has paid off. The agency’s auction event in June sold roughly $17 million of property on the night, while their October group sale resulted in around $10 million in sales on the day, and another $8 million post-auction.
With their next in-room sale slated for February, they already have vendors keen to take part.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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