According to Google the definition of an auction is “a public sale in which goods or property are sold to the highest bidder”.
One would have to think that the property auction results they’d have to be right? Well they aren’t! The real estate industry www.domain.com.au and other companies reporting on the results.
You’ll see the media hyping up the results on the nightly news and how the market is bouncing back which is being measured by false data.
“If the definition of an auction is “a public sale which goods or property are sold to the highest bidder” the “experts” have it all wrong.”
Take for example the auction results reported for 12th October 2019 there were 626 properties that went to auction in Sydney. Out of the 626 properties 353 of these properties were sold at public auction.
If you do the calculations yourself the results will be 54% clearance rate, the true rate. Why have they been reported as 78%?
The simple answer is the data used in misleading based on the properties sold versus the properties that didn’t. The industry counts a sale prior to auction day as a sale and the properties scheduled to go to auction that were withdrawn due to little or no interest are part of the calculations. It’s completely misleading and deceptive.
Why?…. The seller forks out thousands of dollars on unnecessary marketing which promotes the sales agent and the real estate agency. It increases their profile and they are trained to get “marketing dollars” off you to increase their profile not your property.
I recall around 20 years ago I worked at one of the major brands in the local area where I grew up. I was keen, green and ready to learn. I enrolled in a few day courses ran by this major franchise group. One of them was auction training, how to market property by auction.
On the day of the Auction training I headed off with my notebook and full of enthusiasm! I was ready to learn how I can get my future clients more money when they sell their property by auction. I couldn’t wait to share my learning with my local prospects until…….I read the first page of the training material and I couldn’t believe what was before my eyes…..
The picture was a real estate agent standing beside a flashy Porsche. The headline said, “How to Get your Vendors to Pay for You to Drive a Porsche with VPA”.
VPA is an acronym for Vendor Paid Advertising, marketing money paid to the agent from the seller. The penny hadn’t yet dropped for me. As the course went on, I was horrified to learn it was money the agent conned their client to pay to increase their own profile. Let’s face it marketing attracts interest “it makes the phone ring” or in modern terms It generates internet enquiry. Marketing does not sell property, it attracts interest, people sell property.
This whole training course is a story in its own right. We’ll cover this in another topic.
Have You Ever Heard of a Person Ringing Up and Agent asking to buy a Property? “I’ll have that property at 96 Smith Street, Sydney”. The Truth is No!
Photo credit www.jenman.com.au