A failed auction campaign is not the end of the world. There are many factors that come into play on auction day. Some which you can control. Others you can’t.
Remember, Auction clearance rates generally average around 65%, leaving 35% of properties that go to auction passing in. This 35% failed auction figure is probably higher as pass-ins and unsuccessful auction results are less likely to be reported to the REIV.
Therefore despite the frustration you may feel after experiencing a failed auction many properties that pass in are sold shortly afterwards. At some auctions potential buyers will deliberately refrain from bidding, hoping to go straight onto the negotiating stage where they feel they may have more control.
If you have found yourself in a failed auction situation, don’t despair! There are definite steps you can take as you move forward. The tips here will help you navigate through the process and ensure your real estate agent earns their commission.
Failed Auction Tip #1 – Refresh your Internet Listing.
Firstly, your internet listing on the respective portals should be revised after a failed auction. A set price could be advertised, if no price guide or range was displayed throughout your campaign. On the other hand a Contact Agent scenario could be posted if a price guide &/or range was advertised during your auction campaign. Also, think about reviewing your content.
Haven’t you heard the saying: “Content is King?” Did the copywriting clearly articulate the key features and benefits of your property? Did it talk the tone that your key target market(s) would be receptive to? Can the photo order be re-jigged and a new hero photo shot be used? Keep the Buyers guessing and give your property listing a fresher look!
Failed Auction Tip #2 – Make sure your agent follows up on interest.
Another strategy to look at after a failed auction is to ensure your real estate agent follows up all potential buyers who showed interest during the sales campaign.
Potential buyers generally look at multiple properties at any given time. They may have prioritised another property but failed to secure it. And now they are positioned to reconsider yours. The fact that your property failed to sell at auction may be of keen interest to them.
One way to gauge whether your real estate agent is still focused on selling your property is to ask a friend to send an enquiry through one of the internet portals. See how long it takes for your real estate agent to respond.
Failed Auction Tip #3 – Get your board down.
As strange as this may sound make sure you ask your agent to remove your Board after 30 days has lapsed. You don’t want prospective buyers continually driving past thinking is there something wrong with your property and wondering why it hasn’t sold.
Furthermore by asking your agent to remove the Board keeps the pressure on them. It’s also a sign you mean business. What an agent wants most is to have their Board displayed. Better still with a sold sign on it!
Another reason that your Board should come down is that it just may trigger another enquiry from a Buyer interested to know whether your property is still for sale.
Failed Auction Tip #4 – Should you spend more money on marketing?
If your real estate agent asks you to spend more money marketing the property I would recommend you take stock and evaluate what you have already spent. More than likely at this point I would recommend you refuse to spend any more money on advertising. You’ve spent enough haven’t you?
This is an opportunity for your agent to direct and divert buyers from one of the many other comparable properties their real estate firm are likely to have on their books – to your property!
Failed Auction Tip #5 – Did your property look as good as it could?
Most people know that a well-prepared, tidy and attractively presented property, both inside and out, is more likely to be successful at auction but you still see homes going to auction that look like the owner was too busy, or didn’t have the resources to present the home in its best light. Or they just didn’t adhere to this. If you neglected this area, get busy quickly and fix it. Property Stylist’s are around for a reason!
Failed Auction Tip #6 – Reconsider the reserve price you placed on your property.
Did you expect a bit too much? Re-check the most recent comparable prices achieved by properties matching yours in your area. Are these homes in fact very similar to yours or are there differences? There can be many reasons why a similar home gained a better price. They may have had more period features still intact. Better orientation. Less overlooking from neighboring homes. Their gardens were in better condition. More storage. Easier access to the garage. A roof that can take a potential attic extension or simply just a better floorplan. Just because the home basically looks like a lot like yours it doesn’t mean that it automatically translates into an identical price bracket.
Also, the comparable sales need to be as specific and as recent as possible to be valid. You can’t hold on to outdated comparisons from 6 months ago, or even 3 months ago. Things can heat and cool quickly, ebbing with supply and demand. Some of those potential bidders you were expecting to turn up to your auction may have bought a home in the weeks or days just before your auction, taking them out of the market.
Failed Auction Tip #7 – Should you plan for another auction or go with a private sale now?
This is a decision which has to be made case by case, depending on the type of property, the circumstances and the price expectations of the vendor. You can’t generalise. When considering your revised asking price, bear in mind the costs associated with continuing your marketing campaign.
Failed Auction Tip #8 – What the real estate agents usually say.
Agents nearly always say it’s simply about price – just settle for less and it will sell. Obviously $50,000 at their commission rate isn’t much out of their pocket however it is a lot out of yours! They may also insist that advertising must continue because you have to ‘keep the heat on’ and ‘get to all those eyeballs’ however a real estate agent’s shot-gun approach to marketing is not the right answer. However as you can see outlined in the pointers above, there are other factors to consider.
Failed Auction Tip #9 – So where to from here?
As we pointed out at the start of this article on average 35% of auctions pass in therefore at one in three, the odds of a failed auction campaign are pretty high. The good news is that by aligning everything in your favour you can greatly improve your likelihood of a successful result!
If all measures still fail and your Authority period expires – call Vendor Marketing – Melbourne’s most qualified vendor advocates, we specialise in both property marketing and real estate agent selection for property sellers within Melbourne and therefore have the expertise to independently assist you in getting the outcome you’re looking for!
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