Real Estate Mythbusting: Do Auctions Deliver Results in a “Buyers Market”?

Many of us have heard the traditional thinking that auctions are best suited to what is often referred to as a sellers market. This incorrect belief is due largely to a perception that auctions are all about selling under the hammer. However, for highly skilled sales consultants running effective auction campaigns, it is about exposing their client’s property to as many buyers as possible, gathering market intelligence and creating a deadline for action from all parties.

Auction marketing of property allows sales consultants to deal with both conditional and unconditional buyers throughout the time of the campaign, thereby not discounting any possible potential interest. This gives the consultant time to collect feedback of perceived market value from the prospective purchasers (and potentially pre-auction offers).

Auction day gives the vendor a date and time, or “line in the sand”, thereby creating maximum competition on the day to provide the vendor the best unconditional cash offer available at that time.

If it is necessary, the sales consultant will negotiate with the highest unconditional offer first, and then, by multi offer with the conditional buyers. These negotiations usually take place at the time of the auction, or within 24 to 48 hours giving the vendors a clear and accurate understanding of their position.

In effect, this process provides a vendor access to more than one method of selling their property, all within one defined campaign. The auction itself is simply the first stage of this process. Whilst the ideal scenario is to sell the property “under the hammer” this is not the only successful outcome.

Recent statistics reveal that less properties are selling “under the hammer” than 12 months ago. However, our properties marketed using the auction process are selling more often and well under the REINZ Whangarei and Northland averages of 85 days*.

Myth busted.

• *Printed in March 2023 and based on March 2023 REINZ Residential Medians for the Whangarei District.