Regardless of the state of the market, auction remain the fastest way to sell a property, however the response you get is what varies.
For most of this year we found that fewer properties were sold under the hammer. Most were passed in, but offers were made soon after, and in a lot of a cases straight after the auction. This reflected buyer confidence and their ability to get finance.
To be able to bid at an auction you need to have your finance already organised as your bid (offer) must be unconditional - that is not subject to finance or sale. In a lot of cases buyers were unable to do this, either they needed to sell their own property first, which could take some time, or they were unable to secure finance from a lender in time for the auction. So they would attend the auction, hope the property was passed in and make their offer.
Now we are seeing more offers made before the property goes to auction, more attendance at the auctions and more active bidding.
Improved buyer confidence is one of the factors behind this change. People are generally feeling more positive, they know interest rates are good, they know prices are probably as low as they’ll go and if a property shows good value they’re willing to buy.
Reduced stock levels are also creating more urgency. Properties are selling faster and buyers' choices have reduced over the course of the year. They realise that if they want a property they will need to act, they just can't assume it will be passed in and still be available.
The desire not to miss out has also led to more properties selling before auction. Buyers don't want to risk being outbid by other buyers at the auction, so they make their offer beforehand.
This benefits buyers who either have to sell their own property before being able to buy, or need to secure finance. Sellers can accept an offer at any stage of the auction process and many are very happy to accept reasonable offers prior to the auction.
The recent increase in auction activity hasn't just occurred in the top end of the market, with sales under the hammer sales including a multi-million dollar property in Doubleview, a Californian Bungalow in Mount Hawthorn, extremely well-priced family homes in South Lake and Coodanup, and a waterfront apartment in Mandurah.
For more information about buying or selling at auction call Deb Brady on 0405 570 903