Silent Auction vs Public/Friendly Auction
What method delivers sellers the best price?
As a seller wouldn’t you want to know the highest price EVERY buyer will pay?
All sellers want to get the absolute highest price for their property and fair enough. To achieve this, one of the best pieces of advice a seller can be given is never to disclose to other buyers competing offers because then the buyer/s will only focus on outbidding other buyers, rather than paying their highest price.
This situation is what a Public Auction creates.
The auction strategy is often sold as the best way to ‘create competition’ or a ‘buzz’ on the property, and this drives the price up. The agent may say that a public deadline for their bids puts pressure on buyers to perform. However, regardless of the sale process, interested buyers will normally compete for the home they want to buy anyway. Also, a public auction deadline can put pressure on the seller, particularly given the seller has paid for an often expensive marketing campaign along with auctioneer costs and don’t want to risk their property ‘failing’ publicly at auction with the highest bid being recorded, also publicly.
The Public Auction scenario is schemed by agents with the aim being to ensure that a sale is made in front of the crowd.
What often happens is the final bidder was prepared to pay TENS OF THOUSANDS OF DOLLARS MORE FOR YOUR PROPERTY than the second highest bidder. However the final bidder may of only had to pay $1000 extra than the bidder standing right next to them.
Now think of this situation if the bids were not disclosed in a SILENT AUCTION scenario. If the buyer was prepared to pay $30,000 more silently, the seller either gains $29,000 or loses $29,000 depending if bids were recorded SILENTLY OR PUBLICLY.
As Peter O’Malley explains in his book Real Estate Uncovered ‘Every Saturday across Australia – sellers sell their homes for less than the buyer was prepared to pay for it. It amounts to silent pain for the seller and silent gain for the buyer.’
The key message here is; if you as a seller want the highest price for your property, never allow your interested buyers to know what other offers you have received.
This is where a Silent Auction can be of enormous value to a seller. The problem is; most sellers are not aware of this strategy, let alone how much extra $ it can leave in their pockets.
Let us explain how it works. Contact our office and ask for one of our Sales Team today.
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