Is 2021 a good year to sell at auction? The answer depends on a number of different factors. Take a look at whether to sell via auction or private treaty.
When you’re selling your home in Australia, you have a choice between selling via auction and private treaty.
Selling at auction means people bid on your home at the same time, with the hammer ‘falling’ on the highest offer over the reserve. With a private treaty, you can receive offers at any time and you decide which one to accept.
The strategy you choose to sell your home will depend on a number of factors. Take a look at what you need to keep in mind.
Local clearance rates
The first thing experts look at when deciding whether the climate is right for selling your home at auction is the current clearance rates for your area.
The auction clearance rate is the percentage of auctioned properties that successfully sell under the hammer. According to Empower Wealth Advisory, a good auction rate is 70 – 75% or higher, which means that only 25% to 30% of properties fail to sell at auction.
Australia’s go-to source for real estate data, CoreLogic, shared that the national clearance rate was over 77% in the first week of August 2021. This is a great figure but you do need to find out exactly what’s happening in your area.
Demand from buyers
Demand changes, depending on where you live. Some Australian cities are experiencing a lot of competition from buyers at the moment while other areas have gone quiet.
Homes sell successfully at auction when there are plenty of bidders so speak with your agent about how many interested buyers they believe they can bring to your property. The more interest, the higher the bids will go and the more money you will have for your next move.
Keep an eye if you can on other sales in your area. If homes are selling quickly, it is a sign that an auction could be the right strategy.
Similar homes in the area
If you are selling a three-bedroom family home around the same time as some very similar properties, you may not get the attendance you want on auction day.
This is why it is important to have a savvy agent who will review all the pros and cons of going to auction and will let you know if your home stands out enough to get the interest it needs.
Your timeline and flexibility
An auction will take place at a set date and time. Depending on your plan, this may or may not be a suitable strategy.
A lot of sellers prefer to go to auction because it gives them a specific end date to their sales campaign. You also have the option to take an early offer, which can free you from the stress of waiting for auction day.
Generally speaking, the terms of an auction are less flexible than private treaty for sellers as well. You will have less opportunity to negotiate an extended settlement period, for example.
Deciding whether or not to go to auction depends on you, your home, your location and the current market. Work with an agent to find out about recent auction results in your area so you can base
your decision on the most up to date information.
