Why more WA home owners should consider selling their homes at auction
Compared to other states and territories, home auctions are less common in Western Australia, with only around 2% of properties sold using this method.
By contrast, around 23% of properties are auctioned in Sydney, 30% in Melbourne, 11% in Brisbane, 27% in Adelaide, 16% in Darwin and 10% in Canberra.
Across the nation the average number of homes sold by auction is approximately one out of every five.
The main reason behind the lesser auction culture in WA seems to be the success of the offer and acceptance form developed by REIWA. This reliable document used for a sale by private treaty would be familiar to most home buyers, and its simplicity is the main reason why private treaty dominates sales methods here.
However, the strong and fast market in Perth during the boom resulted in renewed interest in auctions – and it wasn’t just confined to the western suburbs or to premium properties, which had traditionally been the case.
When prices were rising quickly during that period, it was often hard for agents to determine the right price for a property or anticipate what a purchaser might be prepared to pay, so an auction proved an ideal way to get the best price for the seller, often exceeding the vendor's expectations.
Of course, the WA market is no longer booming and the median price is more stable, but an auction with its short but high-profile marketing campaign can be very effective at bringing out the more serious buyers on the day.
When there are many properties listed for sale and hesitant buyers are spoilt with choice, an auction might be just the thing you need to give your property the edge it needs to attract attention.
Sometimes the media reports that many auctions are being passed-in at the fall of the hammer, recording no sale.
However, this fails to illustrate that very often West Australian buyers will approach the auctioneer shortly after the conclusion of an auction to negotiate a sale by the more familiar private treaty method. Again, this seems to be more a part of WA’s different auction culture by consumers, but the process still serves to attract keen buyers for the seller in a shorter time.
Auctions in WA are undertaken using a code of practice for the profession following consultation by REIWA with the Australian Competition and Consumer Commission to ensure the code accords to best practice. As a result, REIWA believes its code of conduct lifts the benchmark for ethical auctioneering practices.
Ask your agent about the pros and cons of auctions if you want to explore this method further.
David Airey is president of the Real Estate Institute of Western Australia. This article was originally published on reiwa.com.
