We are gradually moving back towards onsite Auction as the preferred sales method for most of our properties, particularly the broadly appealing single and double fronted period homes in the $1,000,000 – 3,000,000 bracket.
Love ’em or hate ’em, Auctions are still the most straightforward, transparent and efficient way to sell houses in a market that is accepting of and comfortable with them.
Melbourne is the Auction capital of the world. No other city has embraced Auctions like we have.
Auctions are great for buyers who want to ensure they are paying a fair market price (social proof) and aren’t getting stuffed around by shady agents.
Auctions are also great for agents because they are far more time efficient than dealing with a multiple offers scenario. They help with our profile and street presence – especially when they go well and the neighbours are out in force.
At some point Auctions became a Saturday morning pastime for Stonningtonites, along with the three-quarter latte and Cavoodle or Cavador or Cavapoo or Pugalier or whatever breed is currently in vogue.
But Auctions don’t always work.
I vividly remember in 2018 with clearance rates around 45% calling 11 pass-ins in a row, and that was utterly miserable.
And then 2020 came along and we realised that auctions weren’t the be all and end all.
During COVID, from April to September Team Fetter sold 31 out of 33 properties via private negotiation. And it was great!
Most of our properties were marketed as Expressions of Interest (EOI) and came down to just the one main buyer, so this process worked very well.
So what is an EOI?
An EOI is really just a fancy private sale with a bit more structure.
Unlike a private sale with a single figure asking price and no timeframe, an EOI typically has a quoted range (up to 10%) and a similar campaign length to an auction with set open times over three to four weeks, culminating in interested buyers submitting expressions of interest (a fancy way of saying “offers”).
The problem for buyers is that all agents handle EOIs differently.
Is it a one off “highest and best offer” or do you get one or multiple rights of reply?
Will the agent disclose the other offers or not?
Is the agent giving all buyers equal opportunity or are they favouring the buyer who has a “trade in” sale if they buy.
Of course, at Team Fetter and Jellis Craig we run our EOIs in a very transparent, fair and ethical manner.
But even with a perfectly run EOI process you inevitably have buyers who feel hard done by. This can be unavoidable.
Nevertheless, we are still running very successful EOI campaigns – generally for higher end homes or ones that may attract interest at very different levels from buyers.
As they say, an auction is only as successful as the underbidder plus one bid.
If there’s a discrepancy of $200,000 between the first and second best buyer then clearly a private negotiation is going to achieve a better outcome for our client than an auction.
In an upward trending and competitive market like we face now, with limited stock and strong demand, Auction naturally becomes the default sales method.
But one size doesn’t fit all.
And having a good agent that can tailor a bespoke campaign can literally mean the difference of hundreds of thousands of dollars.
Please let me know if I can help.