'Pragmatic pricing’ essential for success in today's auction room

Auction House is reporting a record second quarter in 2023 despite a notable reduction in bidders, a feat only achievable due to realistic pricing according to the property auctioneer.

Related topics:  Auctions,  Finance,  Property
Property | Reporter
17th July 2023
"The trouble with private treaty sales at the moment is that estate agents and vendors try to hold onto unrealistic high prices for far too long"

Q2 sales have risen from 988 in 2022 to 1,225 this year (an increase of 24%) and money raised is up from £155,322,545 to £171,864,939 (a rise of over 10%), according to newly released figures from Auction House.

Year-to-date sales are up too, showing a 22% increase (2,305 this year compared to 1,887 properties in 2022) and over £28 million more raised in 2023 than for the same period last year (£319,997,799 up from £291,884,492).

Auction House Managing Director Jeremy Prior said: “What’s remarkable about these figures is that the property market is getting increasingly more challenging and yet our sales figures continue to rise. As auctioneers, we’re having to contend with a toxic combination of increasing interest rates and decreasing levels of confidence as well as political uncertainty both at home and abroad.

"However, the underlying belief in bricks and mortar as a secure medium to long-term investment remains and there are some fantastic opportunities out there for the cany investor.”

Jeremy admits that there are fewer bidders in the market but says that this fact highlights the importance of getting the pricing for each lot absolutely correct.

He adds: “It’s true, buyers are becoming increasingly thin on the ground, although those that are still in the game are more driven, committed and engaged than ever before. But if you’re trying to sell property in a market like this, you need to ensure that you have two things on your side: professional advice and pragmatic pricing.

“The advice will vary, depending on where in the UK you are selling. There’s no ‘one size fits all’ guidance that will apply to everyone, everywhere. Much of our success derives from the fact that we have over two dozen auction teams across the country, all of them experts in their own individual regions. They each know their designated area like the back of their hand, specialising in understanding how the local market and values are performing at any given time.

Pragmatic pricing

Jeremy explained: “Then there’s pragmatic pricing. When one of our local auction experts suggests a guide price for a property, they are doing so because it’s designed to accurately reflect a realistic figure for what is being sold, whilst also ensuring that it attracts the maximum number of potential bidders.

“This is not about being negative or pessimistic. The competitive nature of the bidding process means that once bidders are on board, they are often reluctant to pull out, eventually resulting in a higher sale price. But crucially, each property has to be guided at a figure which will attract initial levels of interest.

“Auctions are often ahead of the curve when the housing market is about to rise or fall. The trouble with private treaty sales at the moment is that estate agents and vendors try to hold onto unrealistic high prices for far too long – and then wonder why they’re not selling.

Jeremy concluded: “Disillusioned customers are constantly coming to us from estate agents, saying that their deals keep falling through, or that they have been waiting to sell for months. The beauty of auctions is that we can let the market find the correct level for your property and more often than not sell it within weeks.

“A challenging property market like this does throw up fantastic buying opportunities for those who are looking to the medium or long term. But as far as successful sales are concerned, it’s never been more important to seek the right advice and get the pricing correct.”

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