99% of residential real estate salespersons/agents are trained to be auction focused. I was trained the same way and was convinced that it is the best method of sale for most properties.

However, what I have experienced since the market dropped from the peak of 2021 is the contrary. Before I go any further, I want to emphasize that I have nothing against auctions as a method of sale and proudly claim that my team and I won the “Bayleys Individual auction award for 2022/23”. Not an easy feat, especially in one of the toughest markets in history. Therefore, I believe in it, just not that it is the default method of sale for most properties.

One of the greatest investors in the world, Monish Pabhrai, said the following about auctions: “The reason why we make a lot of money in the share market is because of the auction-driven nature of it. In a bull market, shares sell for a premium, but the opposite happens in a bear market.” I can say that it applies to the residential real estate market too.

I have seen some properties sold for below what they're worth at auctions in the past 18 months. It doesn't mean agents are not getting the best outcome for sellers. Let’s face it, we, as vendors' agents, want to get the best price for our sellers. However, sometimes other factors, such as timeframe, might be the main reason for selling, in which case an auction is the best method for achieving that. Unfortunately, due to the fear of not getting the business, no agents are willing to tell potential sellers that an auction in the current market might not get them the best price. What I observe from my industry colleagues is that auctions are still considered the best way to sell because competitive bidding usually drives the price up. However, times have changed, and whether we like it or not, the chances of that happening are much less than 18 months ago.

In summary, if you, as sellers, want to get your property sold within a 3-5 weeks’ timeframe, are willing to accept a realistic price, and potentially lower than what it's worth, then an auction would be the best method of sale. The exception is for properties that are highly sought after due to factors such as scarcity, great schoolings, views, easy-to-maintain constructions, etc. It's difficult to go through all the criteria, but a competent salesperson/agent should be able to assess the best method of sale based on their seller’s property and circumstances.

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