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What agents are advising sellers as auctions lose ground

Profile photo of Andy Webb,  Editorial Writer at OpenAgent

Written by 

Andy Webb.

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For sellers weighing up their options right now, one of the biggest decisions is how to take their home to market.

As conditions have shifted, more sellers are moving away from the traditional auction campaign, and choosing the right method has become a key part of achieving a strong result.

We spoke to two top agents about how they're helping sellers choose the right approach, and what anyone planning a sale can do to give themselves the best chance.

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Why more sellers are changing course

Here's what the shift looks like in practice. A home is listed with an auction date, but instead of going under the hammer, the campaign switches to a private sale, either before auction day or after the property passes in.

That's known as converting to private treaty, and it's become far more common this year.

Domain's latest research found that in Sydney and Melbourne, more than half of homes launched for auction now switch to private treaty, roughly double the share at the start of the year.

The same pattern is playing out beyond the traditional auction capitals. In Brisbane, where private treaty has long been the norm, around two in three auction campaigns now switch methods, and Adelaide and Canberra have followed a similar path.

A growing share of sellers are also skipping auctions altogether and listing as private treaty from day one.

So why is it happening? Auctions work best when several buyers are competing on the day, and when there are fewer bidders in the room, that competitive pressure is harder to create.

A private sale gives sellers more flexibility to negotiate directly with the serious buyers who are there, on terms that work for both sides.

Importantly, these sellers are still in the market and simply choosing a different way to sell, a trend we also explored in our look at why auctions have been losing favour.

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Matching the method to the buyer

For Roy Amery, managing director of Richardson & Wrench Rooty Hill and Mt Druitt in Sydney's west, the move away from auctions comes down to who's buying. First home buyers now make up the majority of his buyer pool, and many of them prefer to negotiate privately.

"They need a cooling-off period to sort their finance out. They've never been to auction before, so it's very nerve-wracking for them, and they don't like that pressure situation."

It's a useful question to put to any agent: who is most likely to buy your home, and why does the method they're recommending suit those buyers?

Roy Amery says first home buyers now make up most of his buyer pool

Dimitri Damianos, a sales consultant and auctioneer at Buxton Oakleigh in Melbourne, has noticed private sales with a set closing date becoming far more widespread.

These campaigns, often run as expressions of interest, ask buyers to submit their best offer by a deadline, which can build competition without the pressure of a public auction.

"Traditionally, I think you used to see [expressions of interest] more just on apartments, but nowadays it's probably not unusual to see them across all types of properties: houses, townhouses, land, units, the works," he said.

Read more: Our guide to choosing the right method of sale walks through each option and where it tends to work best.

Victorian sellers have one more thing to consider. For auctions and fixed-date sales held from 16 October, agents must publish the seller's reserve price as a single figure at least seven days beforehand, under new rules designed to stamp out underquoting, and that includes campaigns inviting offers by a set deadline.

Damianos expects private sales to become more appealing as the rules change, though campaigns with a fixed closing date may also fall under the reserve-price requirement. Victorian sellers should ask their agent how the proposed method would work under the new rules.

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Price it right from day one

Both agents were clear that pricing is where a campaign is won or lost.

"We're actually moving stock," Amery said. "We're selling a good amount of properties, considering how tough it is."

The key, he explained, is getting the price right from the outset.

"Probably the big one now, that we never used to worry about too much, is pricing it correctly from day one. It's almost as important as your presentation now, because so many owners have that sort of mindset of, 'well, I can always come down,' or 'I'll just test the market and see how I go.'"

Getting it right early matters. Miss those first few weeks, he warned, and "you're going to be chasing that market down."

Amery also pointed out that the days of agents winning listings by promising inflated prices are over. In this market, an honest appraisal is worth far more than a flattering one.

Damianos agreed that it all starts with a candid conversation, backed by recent sales of comparable homes.

"The first part is having a really honest conversation with your trusted real estate agent, that you can really believe that they've got your best interests at heart," he said.

Dimitri Damianos says honest advice on price matters more than ever

That honesty sometimes means hearing things you'd rather not. When a seller's expectations don't line up with the comparables, he tells them upfront.

"We've been upfront and said, 'If price X is what you're looking for, you're probably better off not investing your marketing money at this level.'"

Setting a realistic price before committing to marketing spend gives a campaign its best possible start, and he's found vendors appreciate the candour.

Presentation still counts, too, with Damianos noting that buyers are gravitating towards homes that don't need work.

Once a campaign is live, he meets owners face to face each week to walk them through buyer feedback and every offer, whether it's "the good, the bad, and the ugly".

Before you list, it's worth agreeing with your agent on what buyer feedback would prompt a rethink on price or method, and how soon.

The real estate landscape is changing

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The upside of buying in the same market

For sellers who are also buying, a softer market cuts both ways, Amery explained.

"If you're selling at the moment, you're going to take less than what you would probably like or what you would have got six months ago. But you're going to buy less as well. So really, I'm telling owners, it's going to even itself out."

Damianos said motivation is the deciding factor. "If they're upsizing, it's not a bad time to do it because you're buying and selling in the same market," he explained. "But if you're selling to try and just get a record price, well, it's probably not the market to do it."

Upsizers may be the biggest beneficiaries. In Amery's area, homes at $1.2 million and above are moving slower, while entry-level homes are still drawing competition.

"If you're in that lower point, you'll probably have a bit of competition on your home. You'll sell pretty quickly, and then you've got a fair bit of bargaining power at the other end," he said.

Every move is different, so it's worth mapping out your likely sale price against the purchase price and the full costs of moving before you commit. Our guide to buying and selling at the same time can help you plan both sides.

Homes are still selling in this market, but it has little patience for guesswork. Sellers who price realistically from the start, choose the right method for their buyers and stay close to a trusted agent are giving themselves the best possible chance.

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