Ray White Premier agent Joel Simpson believes that auctions work in every market, having regularly achieved significantly better results than private treaty.
The Ray White Castle Hill agent believes that auction is always the best method of sale, claiming that “auctions will work in every market”.
“The perception in the market is that auctions can only be used in a market that’s booming,” Mr Simpson told REB, “which is not the case.”
He stated one key reason for their success is the unconditional nature of auction sales.
“In a falling market, an unconditional sale can be more benefit to a seller due to the buyer not being able to rescind on an unconditional contract or forfeiting their 10 per cent deposit.”
Through auction campaigns, Mr Simpson has regularly been able to achieve the best results for his vendors.
“In the downturn market, we took a property to sale [under] private treaty,” he stated, “it was on the market for about five or six weeks and the highest offer we got was $1.05 million.
“[When] we auctioned the property, we had nine registered bidders and sold it for $1.127 million.”
In a similar feat, Mr Simpson shared that he achieved an extra $80,000 for his vendor through the auction campaign.
“[The property] was on the market with another agent for three and a half months, and the highest offer they could get with a private treaty sale was $1.08 million and we sold it just after the auction for $1.16 million.”
Appraising properties in the current market
When it comes to appraising a property for sale, the Ray White agent likes to “take a big step back from price”.
He stated: “I like to get more of an understanding of what the vendor wants or what they are hoping to achieve, and try and tell them a strategy or a technique around trying to get that price, if not more.
“At the end of the day, it’s ultimately the buyers who value the home, and our job is to create competition and an emotional buyer who pays a premium for that property.”
The market ahead
Mr Simpson has “absolutely no idea” what the market has in store for Australians.
After coming to terms with the downwards market, the agent was surprised to see the slight correction in light of recent events.
“Who knew that we were going to get a Coalition government and banks were going to relax interest rates?” he questioned.
As such, the Premier agent remains unsure whether the market will remain stagnant.
“I’m on the fence [about] whether or not this is going to be a norm,” he said, “or we’re just experiencing a current sugar hit because of the interest rate drops.”
For those concerned about a drop in housing prices, Mr Simpson advises home owners to have a clear financial plan, and believes that anyone who decides to sell “should be selling property for a reason”.
“Don’t just sell property because the market is booming, because eventually it will come back again,” he said.