International real estate group Harcourts is leading the way in the United States with the introduction of the their auction platform and they are seeing phenomenal success.
The Group, which has over 30 offices in the USA began trialling the Australian auction process throughout Southern California late 2014 with overwhelming traction.
This is a departure from the current US mindset that homes sold at auction are default listings, sold under a distressed sale.
Harcourts Director of Auctions, Ben Brady traveled to the USA to determine if auction as a method of sale was a real possibility for the local market.
“After a few days of research, I was shocked that a seller was only offered one way to sell property, via the traditional priced method. There was also a real lack of transparency in the transaction created by multiple offer situations as well as individual buyer and seller representation."
"We saw auction as a huge opportunity to change the real estate culture and provide Harcourts with a point of difference in the United States." Despite being in a different market, the auction platform has tried to stay as true as possible to the way real estate auctions are conducted in Australia and New Zealand. After all, Ben states, "we already know the process works."
Mr. Brady credits the early success to a change in buyer and seller perceptions.
“I think the US market was ready for a change and everyone has been very open to discussing the advantages of auction. Our sales results are tremendously strong and this is great evidence to show sellers that the Harcourts Auctions process is a superior way to sell property,” says Mr. Brady.
To date, the Auction team has sold in excess of 500 properties using the auction process throughout, Nevada, Oregon, Los Angeles, Orange County and San Diego, with the platform soon being introduced in Hawaii.
The average auction sales price in Southern California is a little over USD$1.3 million, with most listings coastal properties.
Approximately 93% of listings are owner-occupied with very few investment properties being listed at this time.
The Group currently has a total clearance rate of 92.5% with 58.4% selling prior to auction.
Mr. Brady expects this percentage to shift considerably higher under the hammer as buyers and sellers become more educated and aware of the transparent Harcourts Auctions process.