By: Andrew Date
The top 7 reasons a property passes in at auction Back
1 – Unrealistic vendors, looking for a price that is not in line with current market conditions.
In a declining market, comparable sales are no longer relevant. The number one reason a property passes in is that the vendor still thinks the neighbour’s house which sold for $1.5 million 12 months ago is not as good as theirs, and they want $1.6 million when the reality is their home is only worth $1.4–1.5M at best.
2 – Not spending enough money on a high-quality digital marketing campaign.
To ensure you leave no stone unturned, a vendor needs a selling agent to tailor a world class marketing campaign to assist with attracting the best buyers. Campaigns can cost anywhere from $5,000 for a basic $600,000 home, to $100,000 for a property that needs international exposure. Placing your money in the right areas is crucial in any market!
3 – Poor presentation and lack of styling can influence the amount of interest in a property.
Staging a property is a crucial element of securing the best price. Have you ever walked through a property with no furniture or art work? It lacks emotion. It’s human nature to pay more when you are emotionally invested in a property.
4 – Hiring the wrong selling agent.
Selecting the wrong agent to sell your home will have an influence come auction day! In a declining market, selling agents may drop their commission to secure the listing. Be very careful if an agent offers to deliver the same result but at a heavily discounted price of a competitor. You pay peanuts, you get monkeys is very true in real estate industry!
5 – Lack of interested buyers.
We are seeing fewer buyers for properties that need a lot of work. A finished product in our opinion is more likely to sell under the hammer in the current climate. If the property is located in a B or C grade location we can also expect it to pass in at auction.
6 – Not timing the sale in accordance with the demand of the specific property.
Timing the sale is a crucial part of selling property. Understanding the local market intimately, and what types of properties you are competing against, can have an impact on the result you achieve. For example, if we had a vendor with a Victorian they wanted to sell and there were already 3 Victorian homes on the market in the street, we wouldn’t advise coming to market with a $30,000 campaign, as it wouldn’t be the best timing to achieve a great result. We might look at an off-market sale in this instance until the competition either sell or are withdrawn from the market.
7 – The property may have structural defects, termites, water damage or a history that buyers are aware of that turns them off the property.
Due diligence is crucial prior to bidding. We can help arrange a contract of sale and vendor statement review within a 24-hour timeframe. We also have access to professional building and pest inspectors who can look for major structural defects and termite activity. The last thing you want to do is take on someone else’s problems.
If you’d like assistance with selling your property successfully, and avoiding having it passed in at auction – get in touch with Industry Insider.