Properties Sell Better at Auction

60% of Aussies wrongly believe private treaty gets them the best property sale price.

It’s the decision that has almost all vendors conflicted: whether to sell via auction or private treaty. New research has revealed 90 per cent of real estate agents believe selling under the hammer secures the highest sale price for a property – but just 41 per cent of homeowners agree.

New property auction data, however, proves that agents are right.

A survey of Sydney and Melbourne agents was conducted by Gavl, the Australian-founded global leader in live real estate auction streaming and bidding technology. Gavl also commissioned a survey of 1001 homeowners across Australia in conjunction with Pureprofile, a leading data and insights company, to compare the findings.

Among agents, 100 per cent of those in Sydney believe properties get the best sale price at auction, compared with 87 per cent of Melbourne agents. Among respondents, 59 per cent who have owned or been in the property market believe that properties sell better through private treaty. Surprisingly, just 17 per cent of Brisbane respondents believe properties sell best at auction.

It seems, however, that vendors should trust agents: Gavl’s own analysis of almost 3000 auction sales it has livestreamed reveals that the sold price is, on average almost $50,000 higher than the price which the auctioneer declares the property ‘on the market’.

Gavl spokesperson Justin Nickerson – Australasian Auctioneer of the Year who has sold more than 5000 properties – says these findings are on par with agents’ opinions and how buyers and sellers are acting.

“Homeowners hold a more reserved position when it comes to selling property as there are multiple factors to take into consideration including fees, the selling timeline and possible worst-case scenarios. By nature, auctions are a more uncertain and unpredictable selling method but often come with a high-risk, high-reward stake. It’s therefore understandable that vendors feel more comfortable with private treaty as a more reliable option.

“Agents, on the other hand, have deeper knowledge and experience of both selling methods, and understand the risks and rewards associated with each. Vendors who follow the selling advice and expertise of agents will often reap high benefits.”

Gavl’s own 5 tips to give vendors peace of mind before going ahead with auction

1. Choose an agent with a good track record.
   Vendors should choose an agent with a proven track record of successful auction results in the area. They should be able to provide you with the suburb’s sales history as well as recent auction figures, including pricing and properties that have been passed in.
2. Choose a realistic reserve price.
   While an agent should be able to advise you what the property is worth and provide a realistic auction sale result, do your own research by watching as many local auctions as you can, in person and online, to get a proper understanding of the market. Choosing a reserve price that is low enough to entice bidders can work in the vendor’s favour by inducing a bidding war.
3. Ensure there is a good marketing campaign.
   Your agent should provide a comprehensive marketing campaign in the lead up to the auction that will draw a strong crowd and achieve results. Agents that used Gavl in its marketing strategy attracted on average, 47% more viewers.
4. Ask your agent to invite off-site bidders.
   Choose an agent that opens up the auction to an expanded audience through auction livestreaming and bidding tools such as Gavl. This allows vendors to exhaust every opportunity in having buyers involved in the sale, even if they are unable to physically attend.
5. Have a strong open home strategy.
   Strong presentation is the key to making the most of your open homes. If timing or budget doesn’t allow for cosmetic renovations, simple updates including beautiful furniture, homewares, and a neutral colour palette can make a world of difference.