Once upon a time (10 years ago at least) some agents used to encourage the auction process over private treaty (for sale). Some of the reasons behind auction marketing favouritism was:

-          Auction marketing is normally on a shorter time frame of 4 weeks, therefore increasing sales turnover and profit for the agent.

-          Because of this shorter time frame, advertising was encouraged to be bigger and bolder to get the maximum number of buyers interested.

-          Property agents like to see their names and portrait photos in print. The bigger the advertisement the bigger their profile! This was a time when print media was the unchallenged medium for real estate marketing.

-          It was common for real estate bosses to incentivize auction listings over private treaty listings i.e. agents earn greater split of commission for auction listing.

10 years ago though real estate agents used brick-sized mobile phones too, so obviously things have changed.

Fast forward to 2010, where online advertising is now a huge part of real estate marketing and has helped to reduce marketing costs. It is now common for an auction advertising campaign to be similar in cost, if not cheaper, than a private treaty campaign.

With an auction campaign there is obviously the additional cost of an auctioneer, but marketing an auction campaign is limited to a 4 week period, whereas private treaty has no deadline and can drag on for months.

One of the positive results of this is that agents are now more inclined to promote and encourage the auction process only if it is suitable to the property and clients needs and not for the agents needs.

In the next blog I will cover ‘The Bidder’s Guide to Auction Day’. Until then!

Check out my last post on On-site vs In-room autions.

Residential real estate auctions are all about pulling at the emotional heart strings of a buyer so that they spend, spend, spend, bid, bid, bid!

At an on-site auction buyers can see, touch and smell what their money is buying them, whether it is the view of Sydney Harbour as the boats sail past or the sundrenched north facing backyard for the kids to play in all year round.

Can a powerpoint presentation create the same atmosphere for a property as on-site? Probably not, and they often technically break down, leaving the auctioneer in the lurch with a room full of people.

Saying that, in-room auctions have some advantages over on-site;

• In-room auctions are weatherproof
• Normally have a large audience (although not if your property is scheduled last)
• Are sometimes cheaper for the vendor (economies of scale)

The ultimate experience for an on-site auction is when someone walking past stops to see what is happening and suddenly decides to bid! This does happen and has happened to me several times. Nothing beats the client quickly having a look through the property and registering (which you can do at anytime throughout the auction process). With in-rooms this is less likely to happen….

Auction Series Part 1: Aution Vs Private Treaty

Auction Series Part 2: The Vendor Bid

Auction Series Part 3: How Much Is An Auctioneer?

Other auction articles we’ve covered in the past.

Registering for an Auction

If an Auction, go to Auction

How Much Is An Auctioneer?

A residential property Auctioneer charges anywhere from $400 to $600 and must be booked a month in advance. If you sell prior  most Auctioneers still charge their fee as they set aside  a date on their calendar and times are limited.

An auction can take 5 mins or an hour so bookings have to be made so that the Auctioneer has plenty of time to move from one property to the next on a Saturday. In-room auctions are easier in this case and more auctions can be done so sometimes a lesser fee is charged for in-room auctions.

Some Auctioneers have a driver for Saturday auctions and some have scribbers so that during the auction they can easily refer to the bids.

Auctioneering is a specialised profession. To be an Auctioneer you must be a Licensed Real Estate Agent and you need to do further training to qualify as an Auctioneer. A good Auctioneer needs to be confident, engaging, enthusiastic about the property and should have thorough knowledge of the local area.

For past blogs see part 1 “Auction VS Private Treaty”, or part 2 “The Vendor Bid”.

• Is my property unique?
• Is my property hard to price because it is so unique?
• How many other properties are on the market with similar characteristics to my property that buyers would be comparing with?

An agent can tell you exactly what market conditions are like.

• Is there a shortage of your type of property on the market?

For example in the middle of winter less people sell but this can be the best time to sell if your house faces north or west and gets loads of sunshine. If there are more buyers than sellers it is the perfect situation.

• Does your property have a view, or is it in a highly sought after position?

Most agents will promote the auction process if your property has either or both of these features. If your house has a characteristic that will lead people to get emotionally attached and thus carried away at auction, go for the auction!

• Is there any number of properties on the market like yours?

Think about what you would do as a buyer. A buyer will look at everything in their price range that seems comparable and if there are a lot of properties like yours on the market, choosing to go to auction could be a mistake. Remember buyers have to do all their inspections prior to auction day with no guarantee they will get the property. When there is plenty of choice for buyers, buyers will tend to look at properties with an asking price before they look at an auction property and spend money on solicitors, pest inspections etc.

Another reason for a vendor to go to auction is time constraints.

- Do you need to be sold in 4 weeks?

- Are you going overseas for work and in a hurry?

- Are you financially strapped and need out?

The auction process puts an end date on the process.

When you have been in the industry as long as I have you tend to live and breathe real estate so it’s sometimes easy to forget that buyers and sellers may be completely new to auctions, are scared of the thought and don’t know the jargon. The point of this auction series is to write things out in plain and simple terms – and to state the taken for granted knowledge I’ve gained from experience.

If you disagree with anything I write please make a comment or email, I am open to other view points and definitely open to discussion. Some of the topics to be covered will be:

• Auction Vs Private Treaty? – How do you choose whether to put a price on your property or go to auction?
• Do you know what a vendor bid is?
• How much is an auctioneer?
• Onsite VS In-room auctions?
• Does an auction campaign cost more than private treaty?
• Bidders guide for auction day
• The difference between a vendor bid and the reserve
• When is the reserve set?
• Can an auctioneer knock back my bid?
• Auctioneer VS Agent? Their role on auction day
• Unconditional, 66W and cool off exchanges

My qualifications:

I am a Licensed Real Estate Agent and I have been selling real estate for 14 years. I am also a fully licensed, non practising Auctioneer!

Last weekend there were 9 auctions scheduled for Saturday 3rd July from Cronulla to Lilli Pilli, Sutherland Shire. On Friday afternoon all these auctions were going ahead except for 1 which was sold prior at 5/3-5 Coast Ave, Cronulla.

On Sat the Beach & Bay team attended each auction and the stats at the end of the day were 5 properties passed in at Caringbah (4 of these auctioned in 1 line), 1 property in Caringbah withdrawn from auction Sat morning and now for sale, 1 property in Lilli Pilli passed in and 1 property in Cronulla sold at auction. If we take the 4 properties auctioned in 1 line as 1 auction, the final auction clearance rate is 33% for our area.

Interesting then that Domain’s Home Price Guide website shows an auction clearance rate sydneywide of 64% for Saturday 3rd July? When I checked through the results the only 2 properties they had tracked in their statistics for suburbs in our area were the 2 properties in Cronulla that sold! So basically they were missing 7 auction results or 4 if we assume the 4 properties auctioned in 1 line were 1 property!

It begs the question how many auctions are being missed in other suburbs? It is a huge job to cover the whole of Sydney accurately and we know this from the experience of tracking the auctions just for our area. Auctions get pulled minutes before going to auction, auctions get passed in with a vendor bid and are published as passed in when they must be published as a vendor bid (false and misleading behaviour), auctions get postponed and sometimes wrong auction dates are advertised. Some are just simple mistakes some are misleading.

We will continue to track the auctions for Cronulla, Burraneer, Woolooware, Caringbah, Caringbah South, Dolans Bay and Lilli Pilli and whether you are an agent, vendor, buyer, interested neighbour you can make up your own mind as to how your suburb is doing!

Kylie Emans started Beach & Bay Realty with many great ideas. She wanted the agency to be independent of franchises, technologically advanced and with agents committed to ethical practice – honest, hardworking and fair. From the get go Beach & Bay has been at the forefront of adapting to changing technologies, embracing the internet as an advertising medium from the very beginning. Over the last year we have been working tirelessly to improve our website – collecting auction results for the public as usual but also adding more and more features.

In the last year….

Looking at Beach & Bay Realty Offline

• Beach & Bay had a record month in February 2010, selling over $15 million dollars worth of property. Considering only 2 agents were responsible for these sales this is an enormous achievement, if we do say so ourselves!

• Beach & Bay was appointed the exclusive selling agents for Drift Cronulla, a  luxury lifestyle apartment block with state of the art inclusions. Everyone here was absolutely blown away by these enormous prestige properties which set a benchmark not only for Cronulla, but Sydney-wide in regards to apartment living. Starting from $2.25million, built by Sammut Developments, and located in the heart of Cronulla, Drift attracted a lot of attention.

• Kylie Emans was nominated for a Telstra Businesswoman of the Year award

• Yet again we have had another full year of secret sales at record prices, proving that our database is not just a gimmick but an excellent selling tool and one we actually use. Instead of 1000’s of names on a list we work with a handful of value clients.

Looking at www.beachandbay.com.au

• 25,000 people have visited our humble independent website
• You have looked at over 78,000 pages
• 11,165 of you are new visitors – (thanks for stopping by, we love you and hope you come back!)

Auction results

• 12,768 is the number of times our auction results have been viewed. We provide this service for free because we want to be the local experts and we want to share our love of realestate with you. (We were also a bit tired with the lack of coverage of our area.)
• 1344 is the number of times our blog has been read – Don’t be frightened guys, we encourage you to stop by and read more. It’s not all real estate talk we promise. We cover local events, charities, property news, current affairs. And if there is a specific topic you would like addressed, just let us know!

Drift, Cronulla by  Sammut Developments

• Drift listings, blogs and posts on Sammut Developments were viewed over 5600 times on our website alone. Many of you wondered what living in the Drift Penthouse would be like and this listing was viewed over 1200 times.

Fundraising for Teneile

• Natalie Vials put the call out to help a friend and past client whose daughter had suffered from brain damage. We developed a website for Teneile Pawley, hoping to raise money to go towards medical costs and buying her a much needed wheelchair. Online donations came pouring in, Nat’s husband, Steven Vials, ran 250km through the Kimberleys to raise support and we topped it all off with a HUGE party at the Brass Monkey Cronulla. To date we have raised $25,000 in 6 months and will continue to support this great cause.

Fundraising for The Leukaemia Foundation

• I asked Kylie if it would be ok if her front of desk –marketing & social media manager was bald. She asked if it was just a new hairstyle I wanted to try (I’ve been known to do drastic things to my hair) and I told her no, it was for the World’s Greatest Shave. With Beach & Bay’s full support I raised money for the Leukaemia Foundation online and also held a fundraising night at Northies, Cronulla where staff and clients attended. $7500 in total was raised and I was in the top 30 fundraisers for NSW. Kylie did draw the line at the eyebrows (I said I would shave them too if I raised $8000…so close!).

Cronulla Buzz

• We created a new feature on our website that lists upcoming events in and around Cronulla. This is more work for us, trawling websites, actually reading flyers in our letterbox, and always keeping an eye out, but it means you can plan your weekends in advance, and that we know exactly what is going on in Cronulla. It’s just another way we hope to show you that our staff members live, work and play in Cronulla – and that it’s a great place to buy realestate!

E-Newsletter

• We recently overhauled our e-newsletter to make it packed to the brim with juicy real estate news, auction results, local events, new listings and blog rants. Released fortnightly this is something you don’t want to miss out on! Email info@beachandbay.com.au and tell us you NEED to be put on our mailing list immediately.

REUNCUT Interview with Kevin Turner

• Kylie Emans was interviewed by Kevin Turner on REUNCUT ‘The Daily Internet Show for Real Estate Professionals’. They discussed online marketing, the transition from print media to online media, the benefits of social media (twitter, blogging and facebook) and the impact it is having on the real estate industry.

Property Ad Guru

• Beach & Bay Realty was featured on this American real estate industry website with a spotlight on our auction results section.

Ok, so enough bragging. What about next year you ask?

Well, we aren’t stopping here. We are a force to be reckoned with and we are only going to get better.

• Our website will keep developing (we have an in-house (overworked) web designer).
• Our auction results are going to be more comprehensive
• Our support of charities will continue. July 2010 marks Beach & Bay Realty’s first attempt at “Dry July” where staff members are giving up grog for a month to raise money for adults living with cancer.
• We will continue selling luxury real estate and expanding our marketing (we currently offer individual property websites, the only agents doing so)
• We will be doing more project marketing since our success with Drift. Stand by for news on this.

Watch this space.

]]> http://beachandbay.com.au/realestateblog/2010/07/02/looking-back-one-year/feed/ 0 http://beachandbay.com.au/realestateblog/2010/06/29/auction-success-amongst-sleep-deprivation-politics/ http://beachandbay.com.au/realestateblog/2010/06/29/auction-success-amongst-sleep-deprivation-politics/#comments Tue, 29 Jun 2010 05:58:15 +0000 Kylie Emans http://beachandbay.com.au/realestateblog/?p=1888 The 57% clearance rate (8 out of 14 auctions sold) last week doesn’t reflect some of the excellent prices achieved in the postcodes of 2230 & 2229 (Cronulla, Woolooware, Caringbah, Burraneer, Dolans Bay & Lilli Pilli).

102 Turriell Point Road Lilli Pilli selling for $200,000 over the reserve and 4 Judd Street Cronulla with a selling price of $1.428mil reflects a solid market, lacking in supply.

The real estate market has been overshadowed in the news with the change of Prime Minister, and mid way through the football World Cup, everyone is sleep deprived and a little grumpy, but when politics settles down and the World Cup is over – stand by for the real estate market to hit the news headlines again!

(But let’s face it – it is quite easy to get distracted in times like these…..)

]]> http://beachandbay.com.au/realestateblog/2010/06/29/auction-success-amongst-sleep-deprivation-politics/feed/ 1 http://beachandbay.com.au/realestateblog/2010/06/08/auction-clearance-lows-record-sales/ http://beachandbay.com.au/realestateblog/2010/06/08/auction-clearance-lows-record-sales/#comments Tue, 08 Jun 2010 01:38:16 +0000 Kylie Emans http://beachandbay.com.au/realestateblog/?p=1776 There is no doubt the market has cooled but out of the 8 sales from 17 auctions in the suburbs of Cronulla, Woolooware, Burraneer, Caringbah & Lilli Pilli last week there were some great sold prices. For example – 81 Mirral Road, Lilli Pilli bought last year in October for $1,075,000 sold on Saturday 5^th June for $200,000 more. $200,000 in less than 12 months is a good earn!

In the current climate, uncertainty in politics and the economy seems to be ruling the day. The 47% auction clearance rate in our area is an indication of this. Until an election is called this could be the way it is.