Aussie homeowners who sell their properties off-market could be sacrificing around $30,000 on average compared to taking them to auction, a new report has found.
New data from PropTrack has found that houses that are sold off-market on average fetch prices that are 2.6 per cent lower than those who sell at auction.
The discrepancy was amplified in New South Wales, Victoria and the ACT, where on average properties sold for up to 4 per cent – or $30,000 – less if they were sold off-market.
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In locations where median prices range between $250,000 and $500,000, off-market sales achieved sale prices of 3.7 per less than those that were taken to auction.
PropTrack Economist Paul Ryan said the extensive costs in listing and advertising a property were often returned due to the competitive nature of auctions.
"Consumers choose to sell properties off-market for a number of reasons including testing interest in the property without incurring fees," Mr Ryan said.
"Vendors need to be aware that the decision to sell off-market may come at a significant cost. While some sellers might be trying to save money by not advertising online, the potential earnings lost in the final sale price are estimated to far outweigh the initial cost of advertising, on average.
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"Sellers and agents both want to achieve the highest sale price possible, and we know that creating competition is the best way to accomplish that.
"The evidence shows advertising online draws a bigger audience, increased competition and a larger sale price."
Ray White TNG Director Shiv Nair recently sold a property in Glenwood, Sydney for $1.26 million at auction after attracting bids of $1.15 million while the property was off the market.
"I advised my sellers to list on the market because I believed there was a higher price achievable. After listing, we had over 30 groups on the Saturday, multiple offers, with final negotiations and contracts signed the same evening. All because of the right marketing strategy," Mr Nair said.
Mr Nair made the case for marketing, arguing that the market's current conditions mean more properties are competing for the eyeballs of potential buyers.
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"Selling off-market or advertising online has always been a topic of discussion for vendors, but it is now more important than ever. Today's strong market conditions with high buyer demand is more of a reason to invest in marketing so you can truly extract the highest possible sale price," he said.
"With the power of online marketing, we are able to attract the maximum level of interest and attention, therefore creating the highest amount of buyer competition, which will result in a premium price for the seller."
Last weekend Australia's capital cities recorded their busiest auction weekend since CoreLogic records began in 2008 after 4261 homes went under the hammer.
Experts cite COVID-19 lockdowns, intense buyer demand and a desire from sellers to move to more lifestyle-oriented properties as primary drivers of the market.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
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