As an agent, you know auctions have been the key selling method over the past few years.
Thanks to the real estate boom over the past decade, auctions have become an increasingly popular way to sell property in Australia.
The huge demand generated by a surging market prompted agents and vendors to take properties to auction as a way to sell quickly and for exceedingly high prices.
For the past few years, news headlines reported record-breaking prices as the hammer went down across Australia.
But things are starting to change. Will auctions too?
As interest rates have risen in recent months, demand has started to decline, and the market is showing the signs of cooling.
In May, the number of Sydney homes sitting unsold for six months or more increased 9.6 per cent, while new listings slumped 5.9 per cent nationwide.
As house prices trend downwards across Australia, most agents typically shift their sales strategy away from auctions towards private treaty sales, believing this is a better strategy.
However, savvy agents will see this dip and understand that now, more than ever, properties need to go to auction.
Education is key
Because vendors in a shifting market need to be educated.
“The home down the street sold for $2.5 million last year. Mine should sell for more!”
Who has heard this a few times? This kind of thinking can be quite confronting for agents, especially in a cooling market.
At times like this, the expectations of vendors who opt for private treaty sales often do not align with the current state of the market.
Having anticipated the same sky-high prices and swift sale speeds that were the norm when demand was high, it is not uncommon for vendors to receive an abrupt awakening when their property languishes on the market for months, and they are forced to entertain offers well below their expected asking price.
The blame game
Then, who do they blame? Their agent.
No homeowner wants to lower their price or sit back and watch as the market dips lower, which is what makes auctions so powerful.
Auctions create urgency among buyers during a declining market in the same way they do during boom times. Plus, they are the best way to demonstrate to vendors the true value of their property.
Not only do auctions encourage vendors to overcome their (possibly unrealistic) expectations, but they can secure a sale much more quickly than waiting around for months for the right buyer to come along.
While we may be seeing a decrease in buyer demand, that does not mean buyers aren’t out there – they simply need some encouragement.
Auctions do just that.
Take action with an auction
Whether the market is strong or weak, auctions remain the best approach for realising the true value of a property.
Equally, however, going into an auction unprepared is a sure-fire way of missing out on a potentially lucrative sale.
So how do you prepare for an explosive auction even in this market?
Promotion, promotion, promotion!
Maximising buyer awareness is the key to a successful auction, and as always, requires high-impact marketing and strong promotion in the lead-up to the auction date.
However, the problem many agents encounter when it comes to promoting a sale is that vendors are either unable or hesitant to cover the large upfront cost of vendor paid advertising (VPA).
Where does that leave you as an agent?
If a vendor doesn’t want to cover the cost of promotion, your only option is to go to auction without the necessary promotion – something that will hurt the vendor’s sale, as well as your commission.
However you look at it, that’s not a great outcome.
If only there was another way…
CampaignFlow makes marketing your auctions easy
Luckily, you can now overcome hesitant vendors with the help of CampaignFlow.
CampaignFlow is a financial product that frees vendors from the burden of funding their marketing costs upfront and allows agents to focus on the crucial job of promoting the property.
With CampaignFlow, vendors have three options for financing the cost of marketing their property:
- Pay upfront: Exactly as it sounds – the vendor pays CampaignFlow and marketing costs are paid directly to the agent before the campaign launch.
- Pay on success: Offering the ultimate peace of mind to vendors. A dynamic risk fee is paid upfront and the marketing funds are transferred to the agent upfront. These funds are repaid by the vendor upon the settlement of a sale and are not repaid if the property does not sell – it’s simple. This is an exclusive option to CampaignFlow.
- Pay later: As a fully accredited and regulated lender, CampaignFlow offers competitive rates and a fixed fee for vendors who don’t want to pay for their advertising costs upfront. All costs and interest are paid at settlement, with a variable interest rate so vendors pay less if they make a quick sale. This way, the marketing funds are transferred to the agent upfront but the vendor can repay the funds later.
Talk to us to overcome vendor hesitancy in a shifting market
If your vendors are failing to see the value of an auction or property marketing in the current market, CampaignFlow can help.
No matter what payment option your vendor chooses, CampaignFlow releases the funds to you upfront so that you can start promoting a property quickly and get the result you deserve.
Visit our website today to find out how we can help you overcome vendor hesitancy and secure strong sales in a shifting market.