by Jemma Pearson The spring weather is attracting buyers to auctions around the Coast. MPP talks to two experts about the auction process and the latest sales activity.

For potential buyers, who may never have bid on so much as an old plate at an antiques fair, an ‘auction’ is the great unknown. Many sellers, too, shy away from auctions, nervous about letting the market put a value on their precious property. Much easier, it seems, to stick a price on the home and see if anyone’s interested.

But in this market, many buyers are realising that chucking up a ‘for sale’ sign in the front yard is not enough to sell. They must consider using the auction process. After all, in the capital cities, they’ve been doing it for years.

Greg Young is the principal of Henzells Mooloolaba and an auctioneer with decades of experience. “Melbourne is the auction capital; people down there are more in tune,” he says. “But over the past 10 to 15 years there has been more acceptance [on the Sunshine Coast]. It was hard yards here  30 years ago.”

And that, says Greg, is because some vendors just don’t understand the process. But more of  the ‘process’ later.

The fact is auctions can be an incredibly effective way to  buy and sell property, and both vendor and  buyer can come out on top. If you are selling,  an auction is often the best way to secure the highest price for your home, whatever the market conditions. As a buyer, it’s a good way to pick the best deal.

With so much uncertainty and lack of confidence in not just the local but national  and global markets, Sunshine Coast property  has been sluggish – buyers are holding off, perhaps waiting to see if prices have bottomed out, and sellers don’t know what a good price is anymore. But with spring a traditionally busy  time in the real estate business, auctioneers are getting busier too.

Award-winning auctioneer Jason Andrew reckons buyers are coming out of the woodwork, when you compare the numbers to this time last year. “I think buyers have been around but sellers are becoming more realistic and buyers are seeing the opportunity,” he says.

Property experts have been telling us for months to buy now, as you can never predict the bottom of the market, and it seems buyers are listening. “What’s sparking that is sellers are finally understanding that now is the time to clear,” says Jason. “Right throughout the course of the year we’ve had the buyers, but sellers haven’t accepted conditions until now.”

Jason also believes there are more properties listed for sale. “There is more choice,” he says. “That’s what we have to be wary of – with more choice, sellers have got to get realistic. One interesting statistic is that a couple of weeks  ago 17 per cent [of properties Jason’s company was dealing with] sold prior to auction and 17 per cent were withdrawn because sellers realised they weren’t going to get what they wanted.”

Paradoxically this is good news for buyers, as it shows many vendors are recognising that in order to sell, they have to meet the market rather than hold out for a price that may never come. “The best agents are giving their vendors decisions  – there is no in between,” says Jason. “You can’t  be Switzerland. You either have to stay or sell.”

Greg adds, “The real sellers have always known that they have to adjust their price to sell.”

So what is a realistic price? In a market  such as the one we are now experiencing  where no one is sure of the answer (we just can’t compare prices to how they were two or three years ago or rely on the old seven- to 10-year property cycle anymore), auctions set the benchmark for property prices. That is, provided buyers are realistic about the amount they are likely to achieve and sellers are serious about securing a home.

“The key is because you don’t put a price on the property [at auction], no one can say it is too expensive,” says Greg. “They have to come and have a look.” The auction process, says Greg, is  all about getting people in to inspect a property.

Which brings us back to that word, ‘process’, because an auction is a process. And while many buyers and sellers think the process ends on the day the auctioneer stands in the backyard, gavel in hand, this moment is just one step in the process, and very often it’s not the last.

For those new to auctions, a clearance rate  (the amount of properties sold at auction) of say 25 or 30 per cent might seem a bit poor, but Jason and Greg are keen to point out that that’s not a bad rate, especially when you compare it with homes open for inspection on any particular weekend that are offered for sale through private treaty. But if we consider the auction event as part of the auction process, for those homes that are passed in on the day, there is still plenty for vendors and potential buyers to be optimistic about. “Don’t despair [if the property does not sell on auction day],” says Jason. “Just keep an  ear out two to three weeks afterwards.”

The weeks that follow the auction are crucial, with many more deals being struck after the auctioneer has left the building. “Last week we quoted 65 per cent within 45 days,” says Jason, which means 65 per cent of the properties his company auctioned were sold within that time. Not a bad rate, really. Jason and Greg’s advice to sellers is to keep the momentum going in the weeks after the auction when potential buyers  are still lurking about.

And while the stress of auction day can get  too much for both sellers and potential buyers,  for a seller it can be particularly rough, sitting listening to the auctioneer calling for bids on their beloved home. Greg has this advice, “Vendors need to understand that they are in control the whole time – they don’t have to sell unless they are happy with the price.”

As a buyer it’s worth heading off to an  auction even if you don’t have the capacity  to bid because you can’t meet auction conditions such as having the right amount for a deposit  or your finance pre-approved. If a property is passed in, most vendors will be keen to negotiate – many a home that was passed in at auction in the morning will have a contract on it by that afternoon.