In-Room Auctions Creating the Right Vibe for Buyers
Large in-room super auction events are proving to be a successful sales strategy during the spring market by building momentum and adding to buyer confidence, according to LJ Hooker.
A number of offices within the iconic real estate network have undertaken auction events with outstanding results.
There was standing room only at one such in-room auction conducted last week by LJ Hooker Padstow, in Sydney’s southwest, which attracted 149 registered bidders. Of the 14 properties that went under the hammer, 11 sold with a total value of $14.5 million.
Principal Lush Pillay was amazed by the massive turn-out for the sales event which took two hours to complete.
“We had almost a couple of hundred people in the room - it was absolutely packed - we didn't anticipate so many would turn up on the night,” he said.
"There was great energy in the room, and this gave people the confidence to bid. The impact of interest rate rises was in the back of our minds, also in the owner's minds, but the people who presented themselves were definitely keen to buy and had their finance approved.”
LJ Hooker Network Performance Manager Paul Moore who has conducted more than 5,000 auctions said there are many benefits to in-room auctions, particularly for offices with a high volume of sales. The advantages include not being impacted by weather or noisy neighbours.
“Another upside is that it keeps Saturdays free for open homes as you can physically only do about eight per day – so if you have two auctions on then straight away two of those slots are gone,” Mr Moore said.
“There is also potential for someone who misses out on one property to bid on another property on the rebound. While it is not a regular occurrence this happens more often than people would believe.”
On-site auctions, however, give buyers the opportunity to take one final look around the property before bidding commences. It also allows agents to network with neighbours by showing their selling skills which often leads to appraisals.
“Some agents think it has to be one or the other, but there are advantages to both types of auctions and it can be dependent on the property,” Mr Moore said.
“In-room events also allow offices to combine and create a promotional event, which also works well in building momentum. It brings all the staff together, which can be difficult to coordinate on a Saturday due to open inspections.”
LJ Hooker Kingscliff will hold its next super auction event in February with vendors already keen to be part of the upcoming sale. Their in-room sales are held at the local bowling club, with a DJ and food and beverages to help create the right atmosphere.
Agent Nick Witheriff said they have capped in-house auctions to 10 properties per event and often list properties at a similar price and similar features. If a bidder misses out on their first preference, they will often make an offer on another one.
During their June auction event, they sold around $17 million of property on the night. Their latest October sales event resulted in around $10 million in sales on the night and another $8 million post-auction.
“In-room auctions have been a very successful strategy for us, we create a fun atmosphere which brings a different energy to when you are selling inside a house and everyone is quiet,” Mr Witheriff said.
“If a property only has two or three bidders then it doesn’t put them out in front of a large crowd like at a standard auction. Being an in-room event shadows any nerves and allows people to go a little under the radar because there are a lot of people bidding on various properties, it is not as obvious as to who making the offer, so they don’t feel so isolated.”