#hammersquad why auctions work.

There is no one best practice but the general consensus among property professionals is both type of housing and market confidence play pivotal roles.

Core Logic RP Data auctions spokesman Kevin Brogan crunched combined capital city data over the 12 months to November 2015 and found higher valued and more unusual properties were taken to auction.

“If you have a house in a street and there are 10 others like it, you have a pretty good idea of what it’s worth,” Mr Brogan said.

“But if it’s unique or unusual you might not be able to pick what it’s worth so you take it to auction on the proviso there’s enough interest.

“Looking at the combined capital city data over the past 12 months to November, you see the general median price of houses that sold at auction is about $950,000.

“Sold by private treaty that median is $530,000, so that tells you a story about types of properties taken to auction.”

Digging further into the Core Logic RP Data digits, almost half (45 per cent) of houses sold at auction sold at a price of at least $1 million whereas only 12.5 per cent of houses sold via private treaty sold for more than $1 million.

“If you’ve got a property you think will be a successful property to take to auction, agents will tell you it offers the maximum chance of success,” Mr Brogan said.

“If you’ve got interested parties it brings matters to a head so it’s a very effective tool.”

Market analyst and buyers’ agent Simon Pressley of Propertyology agrees with Mr Brogan, adding strength of market is key.

“When I would go to auction would be in a rising market when you could be confident there’s going to be competition because of the state of the market, look at Sydney last year,” Mr Pressley said.

“And other times, it might be best if there’s something niche about it.

“That’s often why more expensive homes go to auction because it’s harder to compare $3 million homes to other $3 million homes.”

News Corp columnist and Ray White auctioneer Haesley Cush believes any property can and, with the right marketing, should be auctioned as long as the agent knows what they’re doing.

“Auction allows buyers and potential buyers to judge a property on the features and benefits without price involved,” he said.

“The alternative is that buyers disregard properties all the time based on a listed price attached to photos only to find it’s eventually sold for a price they would’ve paid.

“The stats we carry show auctions get more buyers through the door because they don’t have a price and are usually better promoted.”

Mr Haesley said auctions open up a pool of possibility rather than capping a property by price.

“If your property has no price on it, the value is the value you attract,” he said.

“Alternatively, if you put a price on it and it’s the wrong price then you’re wasting advertising money and time.”

TOP AUCTION TIPS FOR VENDORS:

• Visit your local Office of Fair Trading or Real Estate Institute website to educate yourself about auction rules and the process

• Experience is key so go to auctions to see how they work and what’s involved

• Research the market value of your property

• Select a realistic reserve price

• Only auction with experienced auction agents

• Talk to your agent and be honest with your feelings as it’s their job to support you through the process

• Don’t be disappointed if your property fails to sell on auction day. It is not a wasted effort.

Ray White’s magazine, Australia’s Biggest Auction, will showcase more than 400 auctions across the country. Brought to life by the new PropertyViwAR app, the magazine will be inserted in your News Corp Sunday paper on Sunday, February 28.