How to get REAL market feedback during your auction campaign?

22/05/2019

One of the most important parts of a successful auction campaign is to get accurate price feedback from the market to assist in setting your reserve price.

But there’s a problem: most buyers are very reluctant to give agents price feedback. Even when they do, it’s often not ‘honest’ feedback; it’s usually what they hope to pay, not what they’re willing to pay.

Developing relationships

The key to getting honest price feedback comes down to the relationship the agent develops with potential buyers. That’s precisely why we focus on speaking to people in-depth at opens, as well as pay close attention to all bidders at our auctions. When we see the same faces again at auctions, we already have a really good idea of what they’re willing to spend.

But sometimes this tactic doesn’t work so we have to find other creative ways to get honest price feedback. Our recent auction campaign is a great illustration of one of our ideas and it’s something you can implement in your campaign, or suggest to your selling agent.

The case study

In our recent auction campaign for 14 Grantham Terrace in Mulgrave, we ran a ‘Guess the sale price’ competition. We asked all buyers attending the opens to guess what the eventual sale price would be. The closest guess would win a great prize (and it had to be a great prize to encourage people to give us an accurate prize guess).

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The competition created an amazing buzz at the opens. It was lovely to see so many buyers excited to enter and how much thought they put into their guesses to win the prize.

Now, working backwards, we’d like to reveal to you that the sale price of 14 Grantham was $890,100. It sold for $20,100 above reserve. In a normal auction campaign, the highest feedback we’d receive from buyers for this type of property would be around the $850,000 mark. However, thanks to the competition, buyers tried extremely hard to offer a guess as close as possible to what they truly thought the property would sell for.

The competition also gave us the chance to open up an easy dialogue with those buyers we already knew were really interested in the property about their budget.

Turning to the actual feedback from the competition, the lowest feedback we received was $805,000 and the highest was $950,000. The price feedback averaged out to $858,953. This helped our clients understand the perceived ‘real’ value of their property according to the market, and to predict where the bidding would start slowing down so they could set the right reserve price.

Fast forward to auction day and the opening bid was $700,000. Bidding progressed quite well and then slowed around $870,000. At this point, our client decided to put their property on the market.

Bids continued until the property SOLD for $890,100. The couple who bought the property had entered the competition twice - the husband entered with a guess of $858,888 and the wife at $870,000. With a mix of emotion and the competition, they ended up deciding to pay $20,100 above what they were thinking to spend.

With regards to the competition, nobody guessed it right but the closest was at $886,000.

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Moving forward with your auction campaign

The success of your auction campaign does not rely solely on a competition. The competition exists purely to reveal what the market thinks about your property value. This is very important information which can be used to help you set your reserve price, or perhaps make the decision to sell or not to sell given the current market conditions.

We wish you the best of luck in your preparations to sell your home, and in selecting the best strategy to do so. If you’d like some further advice about the ideal method to use for your sale, please contact our office on (03) 9562 2090.

 

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We had a huge crowd, thanks to the marketing efforts of Audwin and his great team. I have to say that his team is very good & the auctioneer was outstanding. Audwin didn't seem to be putting pressure on people unduly, but he got the result that we were after.

We were impressed from day one with his friendliness, his punctuality, reliability, and his professionalism, and his knowledge of the different marketingavenues that were available, the overseas contacts as well.

Barry and Christine Hudson



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