The crowd has spoken
Sydney Morning Herald
Saturday August 29, 2009
More vendors are seeing the appeal of putting their properties under the hammer. The spring countdown is on in Sydney and, as hopeful vendors put the finishing touches on their homes and interview prospective agents, one fundamental decision continues to tick away in their minds: will they stamp a price on their property or put it to auction?Yet it's been such a hot winter for auctions that economist Matthew Bell, of the Fairfax-owned Australian Property Monitors, suspects many may opt to put their properties in the hands of bidders."There've been some very strong auction results and strong bidding," Bell says, "so auctions are a very good option to consider, whereas a lot of agents and vendors wouldn't have done so in the past."The auction clearance rates for the past three months have averaged 70 per cent, making this the strongest winter since 2001. The average for winter last year was 45 per cent.Median house prices in the June quarter jumped more than 3 per cent nationally and 3.7 per cent in Sydney.McGrath Estate Agents chief executive John McGrath is also an auction enthusiast.At the moment, a lot of properties would benefit from auction because of the extreme shortage of listings, he says. In Sydney, demand outweighs supply, so if you have a special property, this is a great time to go to auction and let the competition for homes dictate the selling price.It's something Justin Ferguson of First National Real Estate Cammeray has picked up on."In the last 12 months, private treaty has been a better way to go because of unpredictability of sales," he says. "At the moment, though, the market is very different and we're leaning towards auction because of the broad appeal of properties in the lower north shore as well as the short supply and high demand for them."However, auctions may not be for everyone. The type of property the vendor is selling, the suburb (for example, auctions are less popular in the northern beaches, the south and outer west) and the price can influence the method of sale."In the price bracket under $600,000, private-treaty sales are still strong, particularly in the east, inner city and high-density areas," says a director of BresicWhitney Estate Agents, Shannan Whitney."First-home buyers and those with less experience in the market respond well to properties with a price stamp.THE ROAD TO SOME PEACE OF MINDRecently married couple Alex and Ken Macmillan decided to sell their Willoughby home by private treaty, despite having bought and sold property at auction before.Their property had no specific wow factor, so they were unsure whether it would attract a great deal of competition at a public auction. Our home was on a main road," Alex says.Agent Heidi King of LJ Hooker Castlecrag set a price guide for the four-bedroom home of between $1.3 million-$1.4 million. It sold only days after going on the market for $1,420,000.The Macmillans believe setting a realistic price and the quick sale was better than the uncertainty of an auction. "It definitely helps avoid all the problems with bridging finances if you buy before you sell, Alex says.They also saw private treaty as a clearer and calmer approach.At the time we were negotiating to buy our next home so we needed to have the security there to get the price right," Alex says.CAMPAIGN LED TO A SHOCK RESULTFor private treaty veteran and northern beaches resident Tracey Cumbers, the decision to go to auction with her uncle's property at 44 Burfitt Street, Leichhardt, was not taken lightly.Because she was unfamiliar with the local property market, Cumbers relied on the advice of her agent, Gerard Inangeri of Ray White Gerard Partners, who recommended auction as the best way to sell the deceased estate.The two-storey Victorian-style terrace, in need of complete restoration, was valued by Inangeri in the mid-$500,000 bracket a price not agreed upon by beneficiaries of the estate.Four days into the auction campaign an offer was made at $620,000 a figure that would become the reserve price at auction.The property sold for $655,000 on the day.Gerard didn't want us to make an unrealistic reserve but it pays to do your research, understand local trends and keep up to date with everything every step of the way to make the experience worth your while, Cumbers says.STRESS-FREE APPROACHA toss-up between private treaty and auction was never an issue when Rhonda and Alan Clarke decided to sell their property, at 37 Northcote Avenue, Caringbah.Having already sold six properties via private treaty, the couple agreed to take the most familiar route and avoid the stress of auction.Auctions are too unpredictable and stressful for us, Rhonda says.There's a lack of security there and we have always wanted to determine the price of our home ourselves.A starting price guide for the property was suggested by their agent, Noni Stuart of Peter James Realty, to sit in the $1.4 million to $1.55 million range but Alan increased it to $1.65 million.The five-bedroom property with a four-car garage sold for $1.58 million a price Rhonda believes exemplifies the merits of private treaty.Alan has always put an extra $100,000 on to our price guides and we've always gotten more for a property because we judge what it is worth, she says.MAKE A BID TO BE FLEXIBLEHaving experienced the highs and lows of auctions in the past, Kirsten Bookalil felt more at ease allowing hopeful bidders to decide the worth of her four-bedroom family home at 99 Bellevue Road, Bellevue Hill.Though she believes an auction can be a challenging process, she says it is the best way to get the best price for a property.Bookalil and her agent, Debbie Donnelley of GoodyerDonnelley Real Estate, had the reserve price set at $3.5 million prior to the auction but during the day's events it was reduced to allow the hammer to drop at $3.33 million.Though the price was not what Bookalil expected, she believes greedy and unreasonable attitudes need to be left behind when selling your biggest asset.You have to be flexible and realistic at auction," she says. "Everything is completely transparent and it's a game that can go either way. Although things sometimes don't go as planned, it's still the greatest way to showcase your home to as many people as possible.
Β© 2009 Sydney Morning Herald
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