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We sat down with Jack McGhee, a sales specialist from our Ray White Surry Hills office who has worked in the inner city of Sydney for over 10 years. Despite the global pandemic, Jack has not wavered from his favourite chosen method of sale - auction. We discussed how his business has changed and adapted over the past few months.
Why do you recommend auctioning to your clients?
There are a number of reasons why we recommend the auction process to our clients. The main reason is that at an auction, there is no cap on the price you can achieve. if you have a property for sale via private treaty online from say $900,000-$950,000 it's unlikely someone is going to offer you $1,200,000. Whereas in auction campaigns, it's not uncommon to get $100,000 or $200,000 over reserve.
It also gives the buyers a deadline to get things organised. You’re giving the buyers a set date to have finance organised, the contract of sale looked over by a legal professional, any strata or building & pest inspections done and any other questions are answered.
What are the steps you have taken to adapt your auctions during the pandemic?
Our office transitioned to online auctions immediately once on site auctions were banned from the government. We had a quick tutorial on how things would change, and from the Thursday, on site auctions were banned in NSW. We sold 7 out of 8 the following Saturday online. During that time, the team sold 16 out of 17 auctions until on site auctions were allowed back.
Why is the perfect type of property to take to auction?
There's not really any specific properties that do well - any property can be an auction property - it's all about how well the process is run. In saying that, last week I had a deceased estate up for auction in Waterloo that was completely unliveable and was on the market for the first time in 80 years. We had over 100 inspections, 33 contracts issued and 15 registered bidders on the day and the home sold for $110,000 over reserve. So I think properties that are rare, or haven't been sold in a number of years or even decades do really well.
What changes have you noticed in sellers / buyers over the last couple of months?
In terms of sellers, we’re noticing that that price range around that $2m mark are doing really well in the Inner City. Now that people are working from home more, they would prefer to be more comfortable in their primary place of residence. So whether that means offloading an investment property to upsize to something bigger, or to add an extra bedroom or extension on their current property, we’re seeing that a lot at the moment.
In terms of buyers they’re a bit more cautious at the moment I suppose due to Covid 19 and job security. They’re looking for the perfect property and happy to wait until they find something that they absolutely love. When these buyers do find something they like, they’re ready to act straight away so for us. It's just about listening to what they want and helping them as much as we can.
What methods of marketing are you finding effective at the moment?
Virtual tours! They’re a game changer! Every property we list has a virtual tour on it now.
Do you have an auction story from the thick of the COVID-19 period that stands out?
One in particular was a property we had at 13 William Street in Tempe that we scheduled for auction on the 28th of March, then on Thursday before the auction the government banned on site auctions, we had a couple of offers around the $1,250,000 to $1,300,000 that the owner was considering taking.
We told the owner not to accept and take the property off the market, and rent it out until we see what the market does. She followed our advice and took the property off the market. It sat empty for two and a half months and we convinced the owner to re auction the property once on site auctions were allowed back. It sold on the 6th of June at auction for $1,475,000 which was $175,000 over reserve. I think in times like these, owners are looking for you to be their trusted advisor and to give them direction and a clear plan on how and what you’re going to do to get them sold at the best possible price.
What is your outlook on the real estate market in Inner City over the next couple of months?
Who knows! I know from the first lockdown due to Covid 19, we came out of it really strong we just did 37 sales in July, with an average of 4.1 bidders at auction with an office clearance rate of 78% and total sales value of $48,000,0000, which was up from 27 sales and $31,500,000 in 2019.
So I think as an office we’ve worked even harder during the pandemic. I think with the new home owner grants, it is a perfect time to get into the market if you’re a first home buyer. There will be some good opportunities coming up I think and if you have job security and if you’re pre approved in terms of finance, I’d be looking into getting into the market as soon as possible and once things go back to normal, you’ll be sitting pretty in a few years time.
Why is it more important than ever for sellers to choose auction as their method of sale?
Taking your property to auction creates that sense of urgency; the competitive environment amongst bidders will ultimately get you the best price on the day. Auctions allow vendors to set their conditions and best of all, an auction sale is unconditional.
