Q: I’m thinking of selling my property and have been told to take it to auction. What worries me is that I’ve been to some auctions where hardly anyone turns up. How do I know I’m going to get a result?
A: Property is an incredibly dynamic market. At any point in time there are a finite amount of properties and buyers in a market, but an infinite number of outcomes. Each property and auction campaign is unique, as is each property. So with all these variables anything can happen!
Generally speaking, an auction that has a big crowd on the day will also have a good number of bidders. You may think that an auction with ten bidders would get a higher price than one with just one buyer, but that is not always the case. Sometimes the only bidder in the room is “the buyer” and with good negotiating skills from the auctioneer we can get a price that our seller is delighted with.
One reason an auction might only have one bidder or limited bidding is that the agent has lost their main buyer/s in the lead up to auction day. It could be that the buyers have purchased something else, or they’ve simply had a change of heart. External factors like job losses, family illness and relationship upsets can also affect who turns up to bid. Either way, a campaign can go from having several strong interested parties to nobody at all, regardless of how fantastic the property is. Timing plays a huge part of any auction campaign, and if there are a number of comparable properties on the market at one time there’s a higher chance an agent will lose buyers during the campaign.
Something else that can happen is that you turn up to your auction and there are only 3 people there – your heart (and the agent’s!) will sink, but we’ve had auctions with just 2-3 people where they have all bid and the property has sold well above reserve, so don’t be too put off by numbers.
Finally, just remember that in real estate, a lot can happen in one day. We have had several auctions where the successful buyer viewed the property for the first time in the 30 minutes before the auction, and another, believe it or not, where the winning bidder was painting the roof of the neighbouring property and hadn’t seen the inside of the property until after he had won the auction!
Good luck with your sale.