Why you should still choose auction in a cooling market?
The fast and energetic property market of a year ago has passed. Sales are down and prices are easing around the country.
We are often told that auction is the best method of sale in a hot market when there is good competition. The logic being that auctions encourage potential buyers to go to their maximum price in a competitive bidding environment.
But what about in a cooling market when competition is less intense?
I believe that an auction is always the best way to reach the highest possible price – no matter what stage the property market cycle is at.
Auction invites potential buyers to consider what is the maximum amount they are prepared to pay for a property. They will come to the auction having secured bank loan approval to a certain level and will already have in mind their maximum figure.
Auctions are a highly charged environment and if there are just two groups keen on a property you have the formula to achieve top dollar.
However, even if there is just one interested party at the auction, the vendor is in a good position to negotiate with a highly motivated cash buyer, who has already secured their finance and ready to purchase.
What I love about auctions for buyers is that they are completely transparent. All the action happens in public and every buyer can see who else is in the room bidding, also the phone bidders if any and everyone knows what all are prepared to pay. Unlike multi offers, the buyer can go away knowing they have paid the price the market has determined for a property.
Posted: Mon 07 Aug 2017