As the auction market softens and the gap between vendor and buyer price expectations widens, agents would do well to begin honing their communication skills.
Despite some properties continuing to attract bullish prices the 65 per cent Sydney auction clearance rate, which is artificially high through manipulation of listings, and 32 per cent in Brisbane recorded on the weekend, suggests buyers are gaining the upper hand and willing to walk away if the price isn’t right.
Settling on a realistic price can be a tricky exercise given the willingness of some agents to offer the world to win the listing and the vendor’s natural desire to hear only the top end of expectations. So the onus falls upon agents to enter into listing presentation armed with the evidence to support considered and realistic pricing guidance.
And that means doing the research, using the readily available data to present comparables, not only in the local vicinity but further afield as well, to present a balanced picture of optimism and realism.
Vendors might also need to factor in a longer selling period and consider whether it is wiser to sell first before committing to the next purchase. The motivation to sell will be the ultimate determinant so agents should be listening closely to their client, knowing the pressure points they face and crafting the campaign around their needs.
We have many agents within our network who welcome a tougher market, not because they have a masochistic streak, but because it allows them to use the skills they’ve developed over many years in both good and patchy markets. In a hot market, as we’ve experienced over the past few years, almost anything sells, often defying logic and intrinsic value.
But the new normal that we are entering into allows the true professionals to shine, working their networks, being creative in their marketing and putting their negotiation skills to the test.
And if a property is passed in at auction it is simply the signal to enter the second phase of the campaign.
It’s worth remembering that there are many more properties sold by private treaty than auction though it remains the preferred method of sale in buoyant markets and areas where the fundamentals support a competitive and transparent forum to draw out the best possible price.
Far from being the kiss of death, failure to sell at auction can end in an even better result where there’s a commitment to do the very best for the client.
Josh Mayo, an agent at our R&W Campbelltown office, recently put a home to auction that drew only one bidder, who raised his paddle well short of the true value of the property.
He and the sales team set to work to find that elusive buyer and achieved a record $955,000 private treaty sale, well above the $900,000 upper expectation and the single $820,000 auction bid.
Character, craft and commitment won out in the end, a lesson for vendors and agents.
