The Death of Public Real Estate Auctions

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The Shift to Silent Auctions

‘Silent’ Auctions (also known as ‘sealed bid’ auctions) are quickly becoming more popular with home sellers. A small group of ideas for silent auction real estate agents have been using ‘silent auctions’ for years. Today its movement is driven by educated and fed-up consumers and ‘outsider’ real estate agents.

Peter O’Malley, director of Harris Partners Real Estate in Balmain, exposes the flaws of the Public Auction system. The system preferred by local estate agents.

He paints a clear picture of how home sellers lose money when they sell ‘under the hammer’. He then explains how to get a higher price with a ‘silent’ or ‘sealed bid’ auction. So, if you’re thinking of selling your home, consider an auction – just make sure it’s a silent auction.

The Problem with ‘Public’ Auctions

At a ‘public’ auction, you don’t end up with the highest price a purchaser is prepared to pay – you end up with the highest bidder. Most real estate agents focus on a sale. Rather than a sale at the highest price.

When asked why private auctions have not caught on Peter explained; “The ‘silent’ auction has not caught on because real estate agents love ‘public’ auctions, and the glory associated with a crowd.”

The reason that agents prefer auctions is because auctions make it easier for agents to make sales. This happens because, at an auction, all the pressure is place on the sellers. Any pressure felt by the buyer is ‘perceived’ pressure.

Not to mention the advertising and auction costs. Agents in the area in which I live, Hawthorn in Victoria, Australia, will pretty much bill you for everything. A new client told us they paid over $9,000 and got no result. “they even took the sign away, I think we paid about $500 for that” said one disgruntled local agent customer.

The Benefit of ‘Silent’ Auctions A higher price because bidding is truly competitive. At public auctions bidders compare Peter explains the point beautifully “The buyers are watching the competition bid so they bid at comparative levels, not competitive”

Attract the best buyers

Many people are put off by bidding in a public forum. So, despite what real estate agents may say, you can attract more buyers to your home with a ‘private’ auction approach.

Success with a silent or private auction depends on the ability of your agent to close a deal. After all who wants to do business with someone yelling at them with a hammer in hand?