The Block Auction Flop – Only 1 from 4 Sold

3 Out of the 4 Properties Did Not Sell At Auction in The Channel 9′s 2011 ” The Block ” Series Final

If you ever needed more proof as to why you should avoid the auction system when you want to sell real estate I suggest you watch a repeat of channel 9′s 2011 ” The Block ” series final broadcast Sunday 21st August.

The show is about 4 teams who compete by renovating 4 individual properties with the intention of the 4 properties being sold at the end of the series.

The winning team is determined by the couple or team who’s property sells for the highest amount above the reserve price after all the renovations are complete.

The final show in the series is all about the big event where the renovated properties are sold, and after a huge 2 hour build up the final show was entertaining and good television but it also really highlighted what a risky process it is to put your valuable real estate to sale using the real estate auction system.

After watching thousands of people wander through the properties with their open for inspection days, the real estate agents who were appointed to provide advice to the contestant on the best method to market and sell the properties clients, continued to tell their clients that the auctions would go well and all would be fine.

The auction night selling results were a stark contrast to the real estate agents optimism that a good result would be achieved.

3 of the 4 properties failed to reach the reserve price and were therefore passed in unsold on the night.

Has there ever been a better public demonstration of how risky real estate auctions are, and what a poor system it is for selling property?

Who in their right mind as a buying consumer really wants to participate in a system where you are being forced to commit to spending hundreds of thousands and in many cases millions of dollars while being shouted at in a large crowd of people by a loud salesman, holding a hammer.

How this is interpreted as a good way to negotiate to achieve the best result when selling real estate is beyond me.

In my opinion real estate auctions are one of the worst methods of sale for selling real estate, this television result just highlighted the risks involve in using this system or style of sale.

Hundreds if not thousands of people inspected the properties, thousands and thousands of dollars spent on advertising and marketing, probably thousands of dollars were also spent by potential purchasers on getting building reports on the properties prior to the auction…

Then the end result, emotional turmoil for both the potential sellers and the potential buyers, shouting real estate agents with pressured faces, and a result of 1 sale from 4 properties offered a 25% success rate.

As if all this wasn’t bad enough, the real estate agents involved have been visited by Victorian Consumer Affairs amid claims of under quoting. It is believed that the Victorian Consumer Affairs took copies of documents relating to the sale they were investigating to detect if the illegal practice whereby a property’s value is deliberately underestimated to bait interest from home buyers had taken place.

See link

http://www.theage.com.au/victoria/state-raids-the-block-estate-agents-20110820-1j3xj.html

I would say that all is about on par for how the auction system really works, but unfortunately you will not hear these home truths from any pro- auction real estate agent.

I think the contestant Amie summed it up best when after the failed auction she just looked at her sister Katrina and said in a stunned manner “well that was just a big waist of time ! “

Penning real estate has sold hundreds of properties over the years but we have never ever sold one by using the auction system.

After watching this show and seeing this result I can confidently say into the future our business will never recommend or advise a client to sell their property by using the auction system.

Update 3/9/2011

Read what this seller said after using auction system