Published on July 17th, 2012
Auctions send a clear market message in rural NSW
Denis McGrath is a firm believer in property auctions for vendors who are looking for results.
As an Elders real estate executive for New South Wales with more than two decades of experience dealing with rural property, Denis has seen his share of ups and downs in the markets – but one consistent thing he has observed is that the auction system is the best way to get properties moving.
Even during the current challenging economic climate, auctions are a great way to get sales going – and to give vendors a realistic outlook when it comes to the market value of their property.
"I know auctions work," Denis explained.
By listing a property without a price and using an auction to track the market, it becomes much easier to show vendors what buyers are willing to pay.
Auctions, he explained, "send a clear message of what the market is" to both buyers and vendors, and are a much more efficient alternative than private sale listings with prices on display.
According to Denis, approximately five per cent of properties sell before the auction is due to take place, while 50 per cent of transactions are recorded on the auction day. All but two per cent of any remaining properties sell within 12 weeks
"Private sales are listed and they just sit there," Denis explained, adding that in some cases, the process can take years.
Back in 2004, when Denis was working as a commissioned salesperson, he recorded 54 sales. Of these, 48 were auctions – and the remaining six properties remained on the market for up to three years.the six that were sold by private treaty were on the market for up to three years, so the auction method of marketing does work
Auctions make sense for vendors who want to move quickly, and Denis advised vendors to take the lead from Australia's financial institutions.
"When banks move, they all auction. They don't list privately," he said. "That's the way to get a result."