Selling homes on auction a popular trend
Dovi Lichtenstein, the on-site residential property auctioneer at Main Street Auctions, says the trend has been under way for some time, but has reached critical mass this last two years and in the last three months 72% of his potential clients have opted to sell their property via the auction method.
"I believe up to a third of homes for sale could come under the auctioneer's hammer by this time next year. In a housing market like Australia the vast majority of sales are completed by auction and judging by local trends it seems we will be playing catch up," he adds.
Sellers and buyers are increasingly aware of the benefits and have embraced the concept. Once the market becomes educated to the advantages of auction, take-off could be substantial.
Removal of stigma
A key breakthrough was the removal of the old 'bankrupt estate' stigma. "Years ago, the public thought an auction meant the owner had gone bankrupt," says Lichtenstein. "That perception is a thing of the past. Today, not all sellers are forced into an auction. They opt for auction because it's the smart way to go."
Key drivers are:
- No ceiling on the value that can be achieved.
- Competitive bidding as the number of potential buyers on site continues to grow.
- Commission payable by buyers rather than sellers.
- Speedier sale completion, usually within four to six weeks.
- Financially qualified buyers - no snags because of problems with mortgage approvals.
- Less intrusive processes for the home seller - no need for scores of people supposedly 'in the market' to view the property for months on end.
"Within the industry we can track the growth of the auction model through advertising and online exposure across the most frequently visited property sites, but grassroots support is also evident," Lichtenstein notes.
The hottest market segment involves homes with a medium to lower value price tag. Over the last two years, attendance at on-site auctions has grown steadily while the number of registered bidders has also increased.
"Clearly, the numbers vary across regions, suburbs and price ranges, but the overall impression is the same nationwide - selling your home through auction has become the preferred option for smart, well-informed consumers and that trend is not going to end any time soon," he concludes.