Auction is not magic, it is not a gimmick created by a Public Relations company and it is certainly not some mystical beast to be feared. Auction is an open and transparent process that has been used for thousands of years for sellers and buyers to exchange goods by determining their value through competition…plain and simple!
Many sellers and agents over-complicate auction in their mind. As a result, they either don’t choose auction as their sales strategy or don’t manage the process effectively and may miss the opportunity to achieve the best sales outcome for the property. Auction has many distinct advantages for a seller, lets discuss one of them.
1. NO CAP ON PRICE
Choosing to market a property with a price (Private Treaty) can provide the seller and agent with a sense of comfort by offering some invisible protection behind a price. Unfortunately, this instantly moves the power of the negotiation to the buyers and this is definitely not in the sellers’ best interest. Coming to the market from the outset with a price is liking playing poker and immediately showing our cards to your competitors. Why would you reveal your hand upfront and pass the advantage your opponents?
Revealing a price upfront tells the market you don’t believe the property is worth any more than this figure. You have unwittingly set a ceiling on the price and capped it from possibly going higher. Buyers will see this price as negotiable, automatically offer you less and put pressure on you to accept. The buyer now has the ball firmly on their side of the court!
Since the dawn of time, the value for goods, services and property have been determined on the principles of supply and demand. Supply and demand is a near perfect law of nature for determining an items value in the market of buyers seeking it. Listing your property with a price is interfering with the laws of the Universe. Auction uses this law to your advantage and heightens demand through competition and emotion.
Join us for our next instalment when we look in more detail how competition and emotion in an auction campaign helps you achieve the best outcome
Auctioneer & Qld Head of Business