Thanks to the real estate boom over the past decade, auctions have become an increasingly popular way to sell property in Australia.
The huge demand generated by a surging market prompted agents and vendors to take properties to auction as a way to sell quickly and for exceedingly high prices.
For the past few years, news headlines reported record-breaking prices as the hammer went down across Australia.
As interest rates have risen in recent months, demand has started to decline, and the market is showing the signs of cooling.
In May, the number of Sydney homes sitting unsold for six months or more increased 9.6 per cent, while new listings slumped 5.9 per cent nationwide. 
As house prices trend downwards across Australia, most agents typically shift their sales strategy away from auctions towards private treaty sales, believing this is a better strategy.
However, savvy agents will see this dip and understand that now, more than ever, properties need to go to auction. 
Because vendors in a shifting market need to be educated.
“The home down the street sold for $2.5 million last year. Mine should sell for more!”
Who has heard this a few times? This kind of thinking can be quite confronting for agents, especially in a cooling market.
At times like this, the expectations of vendors who opt for private treaty sales often do not align with the current state of the market.
Having anticipated the same sky-high prices and swift sale speeds that were the norm when demand was high, it is not uncommon for vendors to receive an abrupt awakening when their property languishes on the market for months, and they are forced to entertain offers well below their expected asking price. 
Then, who do they blame? Their agent.
No homeowner wants to lower their price or sit back and watch as the market dips lower, which is what makes auctions so powerful.
Auctions create urgency among buyers during a declining market in the same way they do during boom times. Plus, they are the best way to demonstrate to vendors the true value of their property.
Not only do auctions encourage vendors to overcome their (possibly unrealistic) expectations, but they can secure a sale much more quickly than waiting around for months for the right buyer to come along.
While we may be seeing a decrease in buyer demand, that does not mean buyers aren’t out there – they simply need some encouragement. 
Auctions do just that.
Whether the market is strong or weak, auctions remain the best approach for realising the true value of a property.
Equally, however, going into an auction unprepared is a sure-fire way of missing out on a potentially lucrative sale. 
So how do you prepare for an explosive auction even in this market?
Maximising buyer awareness is the key to a successful auction, and as always, requires high-impact marketing and strong promotion in the lead-up to the auction date.
However, the problem many agents encounter when it comes to promoting a sale is that vendors are either unable or hesitant to cover the large upfront cost of vendor paid advertising (VPA).
Where does that leave you as an agent?
If a vendor doesn’t want to cover the cost of promotion, your only option is to go to auction without the necessary promotion – something that will hurt the vendor’s sale, as well as your commission.
However you look at it, that’s not a great outcome.
If only there was another way…
Luckily, you can now overcome hesitant vendors with the help of CampaignFlow
CampaignFlow is a financial product that frees vendors from the burden of funding their marketing costs upfront and allows agents to focus on the crucial job of promoting the property.
With CampaignFlow, vendors have three options for financing the cost of marketing their property:
If your vendors are failing to see the value of an auction or property marketing in the current market, CampaignFlow can help.
No matter what payment option your vendor chooses, CampaignFlow releases the funds to you upfront so that you can start promoting a property quickly and get the result you deserve.
Visit our website today to find out how we can help you overcome vendor hesitancy and secure strong sales in a shifting market.