Auction or Private Treaty? Sam Dalby finds out with Jesse Davidson
Sam Dalby: G’day, guys. Sam Dalby here again with Jesse Davidson. Jesse, thank you very much for joining us again today.
Jesse Davidson: My pleasure.
Sam Dalby: Now, we’ve got a lot of vendors that are about to put their properties on the market, and they’re going, “Which way do I go? Do I go private treaty or do I go auction?”
Jesse Davidson: Yep.
Sam Dalby: What should they do and why?
Jesse Davidson: Well, as an auctioneer I’m obviously going to say auction, but I’m going to be able to support that with some pretty good quality evidence. I think in this market it’s really important that our owners understand that there is absolutely no urgency from buyer’s perspective. That coupled with a rural commission, that coupled with the fact that the banks are not really willing to lend particularly on first home buyer assets, and particularly on investment assets … That reason alone, I believe, means that you need to create urgency in your campaign.
Jesse Davidson: Popping a property on the market at $950,000 with a pie-high hope to try and get that price, you’ll watch it fall, and buyers are savvy in this market. They see it at 950 in February. They see it at 925 in March. They see it at 900 in April, and then from that perspective, why do they need to rush in? That property’s continuously falling.
Jesse Davidson: So my argument is in this market is to shorten that period of time. Create the urgency, least at auction, and say to your buyers that, “To my purchasers, I as an owner am willing to sell at a reasonable figure. I’m not going to give my property away, of course, but on the 27th of June in 2019, my anticipation that I want to sell my property, and I want to sell it to the person with the highest amount of money on the auction day.”
Jesse Davidson: If you can take that psyche into your campaign, you will have a lot of success. So, from an owner’s perspective, an auction is really beneficial from there. The second point or benefit to an owner, of course, is the fact that there is no better platform in which to create, I suppose, a dizzying premium, a premium price for your property, than in an auction campaign.
Jesse Davidson: I have done, I would say, four or five auctions this year that have gone at least two million or better above reserve, one that went three. I have multi properties go one-and-a-half million dollars above reserve. That does just not happen in a private treaty campaign, because you’ve laid all your cards on the table. You’ve popped your price there, and then obviously, the standard negotiation process takes place.
Jesse Davidson: So there are the big ones for an owner. It’s transparent, they can get a premium, and importantly, it creates urgency.
Sam Dalby: Fabulous. Jesse, thank you very much. It was very informative as always. Really appreciate your time.
Jesse Davidson: My pleasure. Thank you.
Sam Dalby: Nice. Take care.[/vc_column_text][/vc_column][/vc_row]