Is the way properties are sold set to shift in 2025, with auctions regaining popularity as a preferred method of sale? According to a recent report from REIWA, quite possibly.
This trend stems from changing market conditions, specifically the increasing median days on market for private treaty sales compared to auctions. Both sellers and buyers must understand the nuances of auctions and how they differ from traditional sales in order to navigate this method of sale effectively.
Why Auctions Are Gaining Momentum
Pre-pandemic, auctions were already known for their efficiency, with properties selling in a median of 29 days compared to 51 days via private treaty. Though private treaty sales recently experienced record lows of 10 days, December 2024 saw the median days on market climb to 16, while auctions stabilised at 17 days. If this trend continues, auctions could surpass private treaties in efficiency by late 2025.
Beyond speed, auctions create an environment of competition, often resulting in properties selling at their true market value or higher. This competitive atmosphere, combined with a transparent bidding process, ensures sellers achieve a fair and favourable price.
Key Differences: Auctions vs. Private Treaty Sales
Flexibility for Sellers: Auctions provide greater control over terms like settlement dates, deposit amounts, and conditions. Sellers dictate these terms upfront, reducing the uncertainty associated with conditional sales.
Transparency for Buyers: Unlike private treaty sales, auctions are highly transparent. Buyers see the live bidding process, giving them confidence in the fairness of the price they pay. For sellers, this transparency minimises disputes and ensures market-driven pricing.
Multiple Selling Opportunities: Auctions offer sellers three chances to secure a sale:
Before the Auction: Sellers can accept strong pre-auction offers.
On Auction Day: Competitive bidding often leads to an immediate sale under the hammer.
Post-Auction Negotiations: If the property isn’t sold during the auction, it enters a negotiation phase with interested bidders or private treaty buyers, starting from a clear baseline.
Certainty of Sale: Sales under the hammer are unconditional. This eliminates common delays or risks tied to financing or building inspections, which often accompany private treaty sales.
Considerations for Sellers
For those contemplating an auction, preparation is key. Sellers should:
Work closely with a trusted agent to set realistic reserve prices.
Ensure the property is well-marketed to attract competitive bidders.
Be prepared for fast-paced negotiations, especially if a pre-auction offer arises.
Tips for Buyers
Buyers planning to participate in an auction should:
Secure financing and complete all due diligence before auction day, as sales are typically unconditional.
Familiarise themselves with the auction process and engage a professional to guide them if necessary.
Set a firm budget and stick to it during the bidding process to avoid overcommitting.
Embracing the Auction Trend in 2025
With auctions set to become a dominant method of sale, both buyers and sellers have much to gain—provided they understand the process and are well-prepared. Whether you’re selling or buying, engaging a knowledgeable real estate agent will ensure you make the most of this competitive and transparent approach.
Adaptive Settlements is here to guide you through the auction process, ensuring a seamless and successful transaction. Contact us today to learn more about how we can assist you in navigating the dynamic 2025 real estate market. Source: REIWA.com
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