Why Harcourts prefers auctions?
We believe that auction is the fairest method of sale for both the vendor and the purchaser as it offers total transparency to all parties.
As a purchaser, when you are at an auction you can see who else is interested and gauge the level of desire in the room. You are the cash unconditional buyers, all in one place. There’s no mystery, no fear of ‘I wonder if they’ll put in a bigger offer than us.’ You can see it take place in real time and make an informed purchasing decision.
A metaphor we like to use is that of boarding an airplane. It is the higher status travellers who get to their seats first. An auction is the same. Cash unconditional buyers are similar to people flying first class. They are given the opportunity to bid first on the property. Or the ability to negotiate during the auction process to buy the property. If none of the cash unconditional purchasers are prepared to meet the price of the vendor at that stage, then it is passed on to the conditional purchasers, aka the travellers in the seats further back in the plane.
A successful auction for a seller, is all about getting the right combination of buyers in the room on Auction Day. This is because different people perceive the value of a property at different levels.
‘Bank imposed’ buyers
We may have bank imposed buyer, one who is restricted as to the amount they are able to borrow from the bank, and so are only prepared to pay a certain amount for the property. They are typically always trying to purchase up. Looking for a property that represents better value for money than the actual value they’ve been told they can afford.
‘Planning renovations’ buyer
Then there might be party that likes a property but because they wish to change things, such as put in a new kitchen, they look to discount the value of the property.
‘Must have it’ buyer
At the other end of the scale, you have the buyer who looks at a property, loves it, believes it represents great value at the asking price, and is quite prepared to pay what they need to because they can live in it just the way it is.
If you are lucky enough to have two or three prospective buyers who are loving your property, as a seller you can achieve a premium price for your property, and have buyers who are very happy with the result.