Create the illusion of competition at auction to secure the best price

12/02/2019

When it comes time to sell your home, you want the process to be as hassle-free as possible. That’s why it’s common for clients to ask us whether they can bypass the cost and time of launching a full auction campaign by selling it to someone ‘on’ our books.

Drawing from our buyer pool

As a local agent, we have plenty of potential buyers in our database; around 300-500 at any one time. These buyers are actively looking for properties in our area and we work closely with them.

Out of this pool of potentials, we usually have 15-20 we consider ‘hot’; those who are extremely interested and ready to buy right now.

When a property hits the market, it is tempting to just call these hot prospects and try to sell to one of them. It’s a great option from a real estate agent’s perspective as it means we significantly cut down the amount of legwork! But our experience tells us this hardly ever works in favour of the seller.

How to get the best price

At WIN, our main objective is to ensure we sell every property for the best possible price according to what the market is willing to pay. And it’s a fact you don’t usually know this until all possible buyers have viewed the property.
 
In this case study, we’re sharing some key benefits to launching a full marketing campaign. We hope you find it useful as you begin the process of selling your home.

The case study

It’s a well-known fact competition drives prices up. Interestingly, the case study below clearly illustrates it only takes one hot buyer to do that.

You might ask: “Surely it takes more than one buyer for a competition?” Our answer is “Not necessarily”. Our example below shows you how we created the illusion of competition to get our client the best price possible with just one buyer.

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The owner of 2 Simon Ct in Wheelers Hill approached us in October 2018 to sell their home. They wanted to launch the auction campaign in late November so we had a bit of time to introduce the property to a few buyers on our database. One was Wei (not real name) and she happened to really connect with the property, so made an offer of $950,000. 

At this point, the owner had two options:

1.Take the offer & save around $5,000 in marketing costs or,

2. Take the property to auction to try to secure a higher price.

We discussed in detail the clear benefits of getting as many interested buyers to view the property as possible. They then decided to take the second option of going to auction.

Auction day

We had about 50 buyers view the property prior to auction day. On the day itself, the soft market conditions meant Wei was the only bidder participating. She opened the bid at $860,000 followed by a quick vendor bid of $900,000. She then placed another bid at $920,000, which was followed by another vendor bid of $940,000.

At this point, Wei stressed to us that her budget was $950,000 and that she would place another bid at the price (the same offer she had put in originally).

To fuel the sense of competition, we advised we were not at reserve and to increase her chances of buying that day, her next bid needed to be $960,000. It was a risk as we knew Wei could see there were no other bidders so she would be extremely hesitant to place another bid over her original one.

Wei then consulted with family over the phone and decided to follow our recommendation. But she also made it clear to us that she was now over her limit. But from past experience, we know most buyers have a ‘real’ limit; one you only discover in the heat of a competitive auction.

Wei’s $960,000 bid put us just $10,000 away from the reserve. We then paused the auction to discuss strategy with the owner. We knew we were close to reserve and this buyer was our only hope.

We came back to the auction and took some time to discuss with Wei the fact that in the current market, more properties are SOLD post auction. Letting it go that would only mean inviting more competition back in.

She then agreed to place one final bid at the reserve price of $970,000. The auctioneer declared the property as being on the market and then SOLD to her.

The key benefit

The takeaway point from this case study is that it is imperative to avoid cutting corners when selling. A full auction campaign can really bring you the best possible price, particularly when you have the experience of a real estate agent at hand. One who clearly understands how to create the illusion of competition to generate a price push.

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WIN real estate (are a) very professional, knowledgeable company. Audwin and Roy kept us informed each time they had an open house. It is a difficult market and they helped us all the way. (The) auctioneer worked so hard on the day with limited options. Even our friends commented on how hard the whole company worked on the day to get us as much as they could. Would highly recommend. - Derek and Helen

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Audwin Wibrata is the Director of WIN Real Estate who adapts creativity from lifestyle point of view in his selling approach . He recognises the vitally important role of new technology that plays in today’s real estate market.

 For a private discussion on your plan of selling please contact Audwin on 0403 205 759 or email to audwin@winrealestate.com.au

 You can also connect with WIN Real Estate on social media at: https://www.facebook.com/winrealestate.com.au/

 #winrealestate #realestateagent #propertyauction #sellinghome #mulgraveproperty #wheelershillproperty #mulgraveagent #wheelershillagent

 




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