Why Today’s Property Market Is A Real Auction Market

As recently featured on Eliteagent.com.au, we shared our views on why agents need to take action with auctions to get the best results. Selling under the hammer remains the best approach in all market conditions! While some agents tend to shy away from auctions in weaker markets, now is the time to embrace this method of sale.

View the Elite agent article here.

As an agent, you know that auctions have been the key selling method over the last few years

Thanks to the real-estate boom over the past decade, auctions have become an increasingly popular way to sell property in Australia. The huge demand generated by a surging market prompted agents and vendors to take properties to auction as a way to sell quickly and for exceedingly high prices.

For the last few years, news headlines reported record-breaking prices as the hammer went down across Australia.

But things are starting to change – will auctions too?

As interest rates have risen in recent months, demand has started to decline, and the market is showing the signs of cooling.

In May, the number of Sydney homes sitting unsold for six months or more increased 9.6 per cent, while new listings slumped 5.9 per cent nationwide.

As house prices trend downwards across Australia, most agents typically shift their sales strategy away from auctions towards private treaty sales, believing this is a better strategy.

Because vendors in a shifting market need to be educated.

“The home down the street sold for $2.5M last year. Mine should sell for more!”

Who has heard this a few times? This kind of thinking can be quite confronting for agents, especially in a cooling market.

At times like this, the expectations of vendors who opt for private treaty sales often do not align with the current state of the market. Having anticipated the same sky-high prices and swift sale speeds that were the norm when demand was high, it is not uncommon for vendors to receive an abrupt awakening when their property languishes on the market for months and they are forced to entertain offers well below their expected asking price. 

Then, who do they blame? Their agent.

No homeowner wants to lower their price or sit back and watch as the market dips even lower, which is what makes auctions so powerful. Auctions create urgency among buyers during a declining market in the same way they do during boom times, and are the best way to demonstrate to vendors the true value of their property.

Not only do auctions encourage vendors to overcome their (possibly unrealistic) expectations but can secure a sale much more quickly than waiting around for months for the right buyer to come along. Although we may be seeing a decrease in buyer demand, that does not mean that buyers aren’t out there – they simply need some encouragement. 

Auctions do just that.

Don’t sit around and wait – take action with an auction

Whether the market is strong or weak, auctions remain the best approach for realising the true value of a property. Equally, however, going into an auction unprepared is a sure-fire way of missing out on a potentially lucrative sale. 

So how do you prepare for an explosive auction even in this market?

Promotion, promotion, promotion!

Maximising buyer awareness is the key to a successful auction, and as always, requires high-impact marketing and strong promotion in the lead-up to the auction date. However, the problem that many agents encounter when it comes to promoting a sale is that vendors are either unable or hesitant to cover the large upfront cost of vendor paid advertising (VPA).

Where does that leave you as an agent? If a vendor doesn’t want to cover the cost of promotion, your only option is to go to auction without the necessary promotion – something that will hurt the vendor’s sale, as well as your commission.

However you look at it, that’s not a great outcome. If only there was another way…

CampaignFlow makes marketing your auctions easy

Luckily, you can now overcome hesitant vendors with the help of CampaignFlow.

CampaignFlow is a financial product that frees vendors from the burden of funding their marketing costs upfront and allows agents to focus on the crucial job of promoting the property. With CampaignFlow, vendors have three options for financing the cost of marketing their property:

1. Pay Upfront: Exactly as it sounds – the vendor pays CampaignFlow and marketing costs are paid directly to the agent before the campaign launch.

2. Pay On Success: Offering the ultimate peace of mind to vendors. A dynamic risk fee is paid upfront and the marketing funds are transferred to the agent upfront. These funds are repaid by the vendor upon the settlement of a sale and are not repaid of the property does not sell – it’s simple. This is an exclusive option to CampaignFlow.

3. Pay Later: As a fully accredited and regulated lender, CampaignFlow offers competitive rates and a fixed fee for vendors who don’t want to pay for their advertising costs upfront. All costs and interest are paid at settlement, with a variable interest rate so vendors pay less if they make a quick sale. This way, the marketing funds are transferred to the agent upfront but the vendor can repay the funds later.

Talk to us to overcome vendor hesitancy in a shifting market

If your vendors are failing to see the value of an auction or property marketing in the current market, CampaignFlow can help. No matter what payment option your vendor chooses, CampaignFlow releases the funds to you upfront so that you can start promoting a property quickly and getting the result you deserve.

Contact us today to find out how we can help you overcome vendor hesitancy and secure strong sales in a shifting market.

Did you find this topic interesting?

We’d love to hear your thoughts!

The team at Campaign Flow work alongside forward-thinking agents like you to help you get your Vendor the best outcome when selling.

If you have ideas for future topics for us to write about, contact us at info@campaignflow.com.au.

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