Evolution the key to auction success in 2019
2019 is being touted as an interesting year for real estate sales.
However, there’s plenty that we as agents and auctioneers can do to make life easier for ourselves, and more importantly, increase the likelihood of running successful sales campaigns.
We’ve drawn on our experience across both the residential and commercial sales sectors to pull together some tips and predictions from The Auction Company that you might take into account as you plan your approach to 2019:
Auction may not be the first-choice sales method for many agents in 2019, as they lick their wounds following a tough end to 2018. However, many experienced agents will still opt to go to auction as it provides a defined decision window by both vendor and buyer, and transparency for both sides. Regardless of outcome, the auction process still works to reveal true market value.
As capital growth figures take a hit and with more legislative changes tipping the scales in favour of residential tenants, we could see more competition at entry-level commercial auctions in the $500k-$1.5mil range, as this type of investment proves more favourable with less ongoing maintenance and better returns available for investors.
We expect to see an increase in hard-to-find real estate coming to market as a result of deceased estates and more baby-boomer estate planning, with executors and planners having to conduct a completely transparent sales strategy. Mortgagee sales may also increase as the impacts of the Banking Royal Commission continue to flow through to some parts of the market.
We will see fewer attendees at auctions, meaning auctioneers will have to be more patient than ever, and agents will need to work harder to encourage bidders to attend on-site auctions and participate. Rapport will be pivotal.
Online bidding will continue to emerge and cement itself as a fixture in the auction process. It would be ignorant to think that property is not a commodity that can be bought via an online bidding process. After all, nearly every other commodity around the world can be bought in this way.
The changes in conditions that we’re seeing are an entirely normal part of the market cycle, but as property sales professionals, auctioneers and agents we are going to need to adapt and evolve in order to remain successful.
Some ideas on how we - as an industry - might revise our approach to auction sales:
Try a 6-week campaign for B-grade stock. The reality is this type of stock may need more time to sell, so why not add a week to the auction campaign? Allowing buyers time to speak with the banks and get themselves in a position to buy, especially in residential, can only help.
Prepare and utilise the entire auction campaign window. Teams must set the foundations on how they plan to approach the campaign from the time of authority signing and before the first ad hits the media. Canvassing target buyers early and rolling up the sleeves will be essential.
Vendor meetings with auctioneer. If they’re not already doing it, auctioneers must be meeting vendors in 2019. A vendor’s decision to put their property on the market - or not - depends largely on trust. The “hope” method isn’t going to work in this market, so it’s pivotal to have the auctioneer be part of final week strategy, to thoroughly plan and prepare for auction day.
Regular transparent communication. Tell your vendor everything, even when there’s nothing happening. Both vendors and buyers want to know what’s going on, so communicate with them. It’s pivotal to prepare them for auction day and not assume they know how an auction works, especially when bids aren’t flowing. Own the pass-in and don’t be afraid of it, it’s part of the process.
So as you turn your mind to the challenges that 2019 will bring, we hope our insights and predictions might help.
Regardless of what this year brings, it will present opportunities to learn, grow and reach new heights.
If you’d like to discuss this, or how The Auction Company might augment your auction process in 2019, please don’t hesitate to get in touch.