To auction or not to auction? There really is no question.

Want to sell your Brisbane property? The figures are in and they explain why going to auction makes sense, especially in sought-after suburbs like New Farm. 

Strategy is a big part of a property sale and the plan to sell a property for its best price will look slightly different for every home. 

When we start the process of representing our clients during the sale of their property, after we have done an appraisal and reviewed current market conditions, one of the next important discussions revolves around the method of sale and whether an auction or private treaty exchange is the best option. 

Here’s why we are more likely to recommend an auction rather than private treaty, especially if you own a home in New Farm, Fortitude Valley, Tenerife or Hawthorne. 

Auction vs private treaty

Firstly, in case you’re not aware, private treaty is when people visit your home and make an offer when they are ready. You can review the offer and negotiate, then there is a cooling off period once you have agreed on the final price. 

With a private treaty sale, there is usually a set asking price, for example between $1.5 and $1.6 million. Unless there is a great deal of competition, you are likely to receive offers between these amounts. 

When you sell by auction, people bid competitively, in real time either in person or via a video/phone connection. Once the hammer falls and the auctioneer calls “Sold”, a deposit is taken and the sale is final. 

For an auction, you set a reserve but if there are plenty of interested bidders, the price can go well above this figure. 

Why auctions are hot property

An auction is the preferred method of sale when there is plenty of competition amongst buyers, which is very much the case in sought-after Brisbane suburbs at this point in time. 

We recommend selling at auction for a couple of reasons. Firstly, it sets the date for the day your home will sell. This gives you more certainty around timelines. 

The other reason we will suggest going to auction is the potential to achieve excellent results, particularly in New Farm and surrounding areas. 

As an example, a snapshot of recent auction clearance rates in Brisbane saw 46% of homes sold once bidding was complete. Meanwhile figures generally hover around the far more impressive 70% mark for New Farm.

What’s more, according to research from Ray White, homes sold at auction tend to have a campaign lasting around a month or so, while figures show private treaty homes can take closer to six weeks to sell. 

The proof is in the numbers

We prefer data over hearsay and instincts when it comes to selling homes. 

If you’re trying to decide between auction and a private treaty sale, another interesting figure shows the number of people actively bidding at auction is generally between two and three. 

When buyers in Brisbane reached frenzy levels in 2021, the average number of active bidders was more than four. This year, the figure is still sitting above the long term average and is closer to three bidders per property — and three bidders means a higher price when the hammer falls.  

The other mind blowing figure to watch is the gap between the highest prior offer and the final sale figure. According to information shared by Ray White’s Head Economist, on average, Ray White auctions yield a 12.5% gap above the highest prior offer.  

This is generally because of the competition and sense of urgency generated on the day. Bidders have their eye on the prize and they don’t stop until they get what they want. 

Who wouldn’t be excited to achieve 12.5% more than expected? This is why going to auction makes so much sense. 

Auction gives you a Plan B

When you have a home in a desirable location, an excellent marketing campaign, an agent who leverages their contacts to bring in maximum interest from Australia and overseas, and a skilled auctioneer who will ensure those bids come in on the day, you are almost guaranteed a positive result at auction. 

However, if bidding does not reach the reserve, you at least have direct access to the most interested parties. This provides the opportunity to take a moment, reassess and negotiate with the bidders so you can still make an exchange at a price everyone is happy with relatively quickly. 

There is nothing more exciting than auction day. Your agent will be by your side, every step of the way, and will apply many years of experience to ensure a successful outcome. 

If you want to know more about how going to auction works, we’re always available for a chat. 

I hope you enjoy the read.

Matt Lancashire