Auction Inaction..
The other week I saw Angela, an old friend of our family who I had not seen in about 6 years. I told her I was surprised to see her as I thought they had moved away from that suburb. The last time I had seen Angela and her husband, they had sold a business and had their house up for sale.
Angela began to tell me a story that I hear a little too often, and it goes like this:
“Yes we did have our house for sale. The agent had advised us to go through and do an auction, as soon as they put it online, before we even paid for auction advertising in the local paper, they had two offers. We were happy to clear $700,000 at the time (6 years ago) and were very excited that one of the offers was $720,000.
We were keen to accept the offer, but the agent told us that if we are getting offers like this before the auction, imagine what we will get at auction. So silly us listened to the agent and went for more money.
Auction day came and went, with the highest bid only reaching $580,000, so we passed it in. We tried to follow up and get the other offers but they were no longer interested.
We are still in the house today, and while the prices have been very strong around us at the moment and we might get more than mid $700’s now, I just don’t want the stress of it all again.”
Angela’s story is not uncommon. If you ask around you will find it happens often, almost regularly.
Who is at fault, is it the agent or the seller?
I have no idea as I was not there in the discussions. However, myself and the RPA team has seen both cases;
1) Agents promise and don’t deliver and
2) Agents tell the seller that the price is a good fair market price, but the seller wants more.
Either option involves pride and greed.
The point is, if you have realistic expectations and you think the price is a good/strong/fair price then be guided by agent, yes, but don’t rely on them to make your decisions.
It is your money.
A good agent will be happy to take a strong price before the auction day, and not go to auction as it is ‘part of the process’.
Remember, a successful auction campaign is one that sells for a good/strong/fair price before, after or on auction day.
What really happened here is that a sales plan was not implemented. A good agent will develop a justifiable price and strategic marketing for your property, that will act as a guide for you during the process.
In the cut and grind of selling your most prized asset, emotions run high. When emotions are high, intelligence is low and bad decisions are made.
Having a drafted plan prior to your home hitting the open market, will mean that your ability to make non-emotional decisions and deal with the best offers, will be increased many times over.
If Angela had a plan that stated, ‘we won’t look at any offers under $650k, if an offer appears above that we will review it and if it is above $700k, we will probably accept it,’ would have made her situation so much less stressful.
Buying and selling houses can be fun, but when things go bad, it can totally disrupt your plans at that point in your life and put you in a state of flux for a (potentially) long period of time.
Make sure you have good advisors around you, stick to your plans and don’t get greedy.
Till next time
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Since 2004 Scott Northcott has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scott has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model. By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scott designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.