When elections and auctions collide
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Apr 15, 2019
When elections and auctions collide
What should agents do if they have an auction booked for May 18?
With Prime Minister Scott Morrison visiting the Governor-General's residence, officially starting the election campaign, hundreds of real estate agents who booked May 18 for auctions face a tough decision.
Those agents have three options:
- panic - which commonly leads to cancellation;
- postpone the auction;
- or show vendors confidence and stick to their plan.
For those that panic and cancel the auction, what sort of message is that sending their vendor?
It displays a lack of confidence in the agent’s ability and sales strategy.
Switching to private treaty at a point in the market cycle when buyers need the encouragement of a sales deadline is a reactionary response and the outcome will show that.
Even if an agent has the hotline to The Lodge, an impassioned plea to the PM to push the election back a week won’t hold much sway.
If agents aren’t keen on sticking to May 18, it’s safe to say their auction - not the election - will be the event that shifts.
Postponing the auction by a week - or even two - is not the end of the world, but could make things harder.
If agents have already printed marketing collateral, it’s hard to make the vendor cough-up for an amended round of material, so the agent’s decision to move the date will also carry costs for them.
Additionally, other agents might be thinking the same thing, creating a bottleneck of auctions in the back end of May and early June.
At the moment, it’s a struggle for agents to make their properties stand out in the marketplace – they could end up striking further competition by backing their campaign into following weeks.
It’s also likely that agents have advised the vendors to defer auctions until after the Easter school holidays. Asking the vendors – who want a fast sale and settlement through the auction process – to defer their sales plan, again, may test the relationship.
Agents should stick to their original plan – May 18 – for the following reasons.
At the 2016 Federal poll, 31% of all votes were lodged before election day, according to the Australian Electoral Commission. Pre-poll votes are proving exceptionally popular – its representation has more than doubled since 2004 and will no doubt increase again in 2019.
So, one in three bidders / interested onlookers will have already cast their vote before the auction.
Of the remaining prospects, is the act of voting such a disruption to derail your auction strategy?
Multiple schools, scout halls and community centres in each electorate are open until 6pm on the day.
Even with the onerous preference requirements on the Senate form, lining up, ticking off your name, popping the sheets in the ballot boxes and grabbing a sausage sizzle in the carpark shouldn’t take more than 15 minutes’ time.
It’s more time-consuming getting a station-wagon full of kids, half-time oranges, water bottles, sports tape, shin guards and changes of clothes off to junior soccer on a Saturday morning than ducking out to the nearest polling booth.
On their own, agents can’t determine who’ll reside at The Lodge after May 18.
But by sticking to the auction process – buyer engagement, soliciting pre-auction offers, effective marketing and so forth – agents can change who owns the property they’ve taken to auction that same day.
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