I wonder if the Block properties used private treaty, would they all be sold by now

I’m claiming professional privilege as my excuse for being one of the million plus people who tuned in to watch The Block auction on Sunday night.

For me the fact the auction was such an anticlimax came as no surprise.  It was a reality show that didn’t set very realistic expectations.  Auctions don’t always end with the hammer going down on a sale.

The uninitiated might think real estate auctions would present for exciting television because of the high stakes and high tension in the room.  True, but more often than not auction night is a stage in the process to securing a sale rather than a guaranteed conclusion.

And so it was on The Block. 

The masses of commentary that followed the program this week claim the auction was a dud.

In actual fact the most realistic thing about The Block sale process was the fact that deals were done in the crucial days following the auction.  Parties with a genuine interest in the properties knew the time was right to come to the negotiating table and deals were done.   

The Block showed that passing a property in on auction night doesn’t automatically mean the vendors are desperate and prepared to accept any price.  For two of the passed in properties on Sunday night the deals eventually secured were significantly above reserve.

It shows that even though it can be disappointing an auction hasn’t ‘failed’ if a deal isn’t done on the night. 

Also remember the issue with selling by Private Treaty is ‘days on market’ because the cost of selling increases with each passing day.  Private treaty provides no push to get potential buyers sitting at the negotiating table.  The main benefit of an auction in this market is actually creating an environment where a deal can be done at the very best price the market can offer.

My personal preference is to auction everything and with the Morton & Morton clearance rate well above 80% I’m confident recommending that option to our clients.