Moving quickly is the key to a good result
Urgency is a key tool to use in negotiations. Buyers feel it when an agent says interest in a property is high – they don’t want to miss out!! Similarly, vendors feel it when their property languishes on the market for months – will it ever sell?!!
Auction campaigns are about harnessing interest from buyers towards a definitive date and time, at which point buyers face off. Auctions are ideal in creating urgency on the part of buyers.
As a vendor, it’s critically important to set a realistic Reserve price in order to take advantage of the emotional environment created over the course of a 4-week campaign. Certainly, there are times where Passing In the property is the best course of action, but be aware of the potential risks of post-auction selling.
This graph shows the average discount vendors can expect after their property passes in. Clearly, the longer the property sits on the market, the heavier the eventual discount required to ultimately sell.
When a property passes in, generally the best course of action is to enter into serious negotiations with the highest bidder. Part of this is about ‘striking while the iron is hot’ and negotiating from a position of relative strength (where the purchaser still feels a degree of urgency).
If immediate negotiations fail, you may choose to move quickly to a private sale method, with a clear asking price. Quite often, interest in the property still exists, and things can move to a multiple offer scenario, where urgency between buyers ramps back up.
The bottom line is it’s important to quickly recognize what the market is saying with regards to price, and make a decision early about how far you’re willing to adjust your expectations.
If you wait too long, the urgency felt by purchasers can be replaced by your urgency to sell (and move on with life!)