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Welcome to the Gold Coast Smart Real Estate Podcast—the ultimate guide to navigating one of Australia’s most dynamic and competitive property markets. Hosted by Brad Scott, Principal of Smart Real Estate with nearly two decades of experience, this podcast is your trusted resource for making smarter property decisions.
Whether you're buying, selling, investing, or simply wanting to stay informed, each episode delivers practical advice, innovative strategies, and expert insights tailored to the unique Gold Coast property scene. From market trends and maximising investment returns to insider tips for selling your home quickly and for top dollar, Brad covers it all.
Hit subscribe and join the community of "Smart" Gold Coast buyers and sellers transforming their real estate journeys. For more resources, visit www.smartrealestate.com.au or connect with Brad on Facebook, YouTube, and Instagram. Your next smart move starts here!
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Welcome to the Gold Coast Smart Real Estate Podcast. I'm Brad Scott, here to help you make smart moves in the Gold Coast property market. Whether you're thinking of buying, selling, or just staying updated, we deep dive into everything you need to know. From our market insights to our unique open offers method of sale, a blend of auction and private treaty to give you the best of both worlds.
Let's jump in.
Hello and welcome back to the Smart Real Estate podcast, where we give you insights, strategies, and smart moves to get the best results in the Gold Coast property market. I'm Adam Bell, and today we're tackling a big topic. One that a lot of people don't question enough. And that is, are auctions really the best way to sell your home?
Now, for years, auctions have been marketed as the fastest way to get the highest price. But is that actually true? What if we told you? There were serious downsides, like emotional pressure, a limited buyer pool, and a process that might not be as transparent as you think. Now to break it all down, I'm joined by someone who's challenging the way we sell real estate on the Gold Coast, Brad Scott, Principal of Smart Real Estate.
Brad is an expert in the open offer method of sales. Which is changing the game by offering a fairer, more transparent, and potentially more profitable way to sell your home. Brad, great to have you back here on the Smart Real Estate Podcast. Thanks Adam. Alright, let's start with the big one. Why do so many people believe that auctions get the best price?
Good question. So I think that probably comes down to mostly from the media, probably a lot of TV shows, especially like the block and stuff like that. So we all, we've all seen the block and, you know, the auctioneer standing up there and creating that competition and driving that price up. So I think that's sort of.
And especially in some markets, particularly Sydney and Melbourne. Yep. The majority of probabilities are sold via auction. Less so in other markets, so definitely on the Gold Coast, it's probably more like 80 to 90 percent private treaty. Yep. Only around 10 20 percent sold via auction. Okay. So, because you do, you do see these TV shows and everyone thinks they're going to get a bidding war on their, on their property, don't they?
I think, you know, the lay person has always had in the back of their mind, well, surely if we have an auction, that's the best way to get the best price. But what are some of the biggest misconceptions sellers have when they choose to auction their home? Yeah. So some of the misconceptions is that. They're going to have a bunch of buyers, and it's going to go boom, boom, boom, boom, boom.
And they're going to make hundreds of thousands in profit. In a perfect world, that's what would happen. Yep. And definitely auction has its benefits. You know, it's good in some scenarios where you need to sell in a short time period, no matter what. If you have termites, building issues, maybe a probate with death, you're not emotional, you just need to get it sold.
Yep. Uh, mortgages in possessions are always auctioned because they Can't do a longer private treaty campaign, but some of some of the the biggest misconceptions Is that they're gonna have a a lot of buys. I think he's probably the biggest one Yep, because that's probably not explained to them truthfully or I want to, I want to fix on this a little bit because this was something I didn't realise.
You're actually getting a much smaller percentage of the buying pool, don't you? You're not getting the biggest at all. In fact, it's the opposite. Yeah, so Explain that to us. Yeah, so when I go and see clients, I explain to them that we can do private treaty where you'll have 100 percent of the buy pool.
So you'll have conditional buyers subject to personality and finance. I sort of say, look, you know, if we had 10 buyers for your property, say, usually 10 percent will be cash unconditional, in our experience. Around 80 percent will be subject to personal building and finance, that's what we call like a normal buyer.
And you'll usually have about 10 percent that are subject to sale. And they're your weakest buyers because they have to sell something in order to buy something else. So With auctions, you're essentially going to lose like 90 percent of your buyer pool. So you might only have one, hopefully you've got two cash unconditional buyers.
And those buyers are the hardest buyers to deal with because they're cash. They're very strong on terms and they know that. They know they've got the upper hand. Yep. And so Harder to negotiate with. They want to get a deal because they are cash and there'll be less of them. So when you're doing an auction, you'll have less buyers.
With those stronger buyers, definitely, it's a done deal. Good for certain agencies who want to turn properties over quicker. But is that in the best interest of the sellers and getting the highest price? Probably not. So open offers is a little bit It's kind of like a hybrid between private treaty and auction.
It has that auction component where it allows basically all 100 percent of the buy pool, like private treaty, to compete in an open and transparent format like auction. But it includes 100 percent of the buy pool, not only that. Makes sense. Alright, emotional pressure is another huge factor at auctions, isn't it?
How does that impact both buyers and sellers? Yeah, so look, we've, we've done a lot of traditional auctions over the years. I personally, as an agent and another fellow human being, don't particularly like to put people under pressure when they're selling a house. I want them to feel comfortable, want them to feel at ease.
There is a, A whole school of training about putting that pressure on the client to make that quick decision on the day. So agents are trained in, in doing that. Yeah, unfortunately, which I don't necessarily agree with, but I understand why they do it. But it is very stressful for sellers. And I've heard, obviously, a lot of stories from sellers who haven't had a good experience with auction.
And that's why with open offers, I, I like it a lot more because it starts on day one. And it actually happens in half the time of a traditional auction with a lot less pressure because they see the offers coming in from day one over usually a two or three week campaign as opposed to normal four week campaign.
Auctions are generally four weeks and then. and then they have the auction on the day, there's all this fanfare and, you know, and there's a lot of pressure for the seller to make a decision. It generally doesn't get to reserve and then they're usually pressured to drop their price. Um. This is the thing, isn't it, that I've thought about a lot since doing this podcast series with you when it comes to auction.
Again, I'm a lay person and when you think about going to auction, you're probably getting all hyped up. You've seen the TV shows, your agent's probably telling you, you know, we've got a good chance or, you know, talking it up, let's just say, and you're expecting, yeah, we'll hit reserve and hopefully at that point, you know, It'll just continue right we'll have this bidding war that we expect but the reality is most the time It's what you're talking about here, isn't it?
Where it doesn't reach reserve Then there's this this emotional drop in someone like I'm hyped up. I want I want to sell this property today. I, I don't want to have to, I was ready to do this. And so the pressure now comes on, well, we still can, we just got to drop your reserve and, and we can make this.
And again, even things like, but if, but if they know it's on the market, if the buyers know, you know, and we dropped the reserve, then maybe we will get this. Am I right? Is this correct? Yeah. So, and that's the whole. the whole ethos of some agencies is, you know, there's no real downside to them because what they will generally try and do is do that auction campaign over that four week period, they'll set a reserve, they'll give them that feedback, that reserve will usually come down over that period with the feedback from the buyers.
Then if they've got the, if the motivation from the sale is high enough, they've got that reserve down, it hits reserve. Once it's over reserve highest bidder wins. And it's a cash on conditional deal, so they put the sold sticker up, 30 days later it settles. It's a quick, easy deal for the agent. If it doesn't get to reserve, which normally it doesn't, then, you know, again, they sort of say, well, you know, we've got these two registered buyers, and the reserve might be a million.
They started at 7, it's gone up to 850, and they say, okay, you've got to come from a million down to 850 or 900 or whatever it is. And the seller says, well, no, you know, you told us a million dollars at the start. And they say, yeah, but this is the market. This is the best you're going to get. It's cash unconditional.
You've done all this work. In the back of their mind, they're thinking, yeah, you've, you've spent your money on your marketing. And so then they're either going to make a decision and drop it and sell it. Which, you know, I don't think it's really fair on the seller. I get anxiety just thinking about this, just talking it through.
Um, the other alternative is then they don't sell it. And then they say to the seller, Okay, well, we're going to now put it on private treaty in week five. Which is not the best thing to be doing. But, they've now got that client from, you know, what was a million dollars. They say, well, the highest offer was 850, we'll put it on for 900.
Alright, so they've got them down effectively 100. Now we open it up to the other 90 percent of the market, the conditional buyers, and boom, it sells usually within one or two weeks later. So, that's the game, that's how it works, um. You can see here why it cannot, only in certain circumstances it's probably the best way to go.
I mean, there's just so. As, you know, agents are employed, we have a fiduciary responsibility to get as much money for the seller. We work for the seller. Of course. We are sales agents to get, my job is to get as much money as possible and I don't apologise for that. for my client who is a seller. So, we've opened offers.
It's different in that, you know, in the first two or three week period, while it's still hot and fresh, you have 100 percent of the buyer pool. From day one. From day one. So, the buyers and the sellers know And they can see the offers that are going in. They know what the market's saying from that moment, don't they?
And then, after a shorter time period, after two or three weeks, we've got 100 percent of the buyer pool there. And the seller can choose, there's no reserve, they, but you have conditional and unconditional buyers. And then the sellers get to choose any offer, based on price and term. So, it doesn't have to be the top offer.
If somebody's, you know, 10, 000 less cash on conditional, they can choose that offer. Or if somebody's paying an extra 10, 000 and they want person building finance, that's totally okay. Whereas a traditional auction, you can't do that. That person can't buy under auction terms. So, you know, the sellers have an idea, the two or three weeks lead up to that final offer stage, they know where the market's at.
They know, they can see where the offers are at. There's no surprise, there's no like high pressure tactic. You know, it is what it is. But you're generally going to get, you know, an extra 50, 000, 100, 000, sometimes 300, 000, 400, 000 more because you've got 100 percent of the buyer pool. Yep. And, yeah. And they can see where it's at.
Yeah, and there's less pressure, like, you know, I don't have to sit here and, you know, Bang them on the head, as they used to say, and it's just, I just rock up and I say, well, there you go. I like to say it is an open and fair online auction process, effectively, that everyone can see, every buyer can be involved, the seller knows what conditions are coming with each bidder, and it's all there for everyone to see.
To me, it is the perfect system, and I can't understand why it just isn't. That way across the board to be absolutely honest. Well, the good thing is there's not a lot of agents on the Gold Coast using it because you have to have a special certification to offer it. And that's great for us because, you know, it's a little bit of a unique selling proposition for us.
And I think when we explain it to sellers, they love it. And when we meet buyers. They get Love it as well. They love as well. They said they love, you know, it's just perfect for, for both. Yeah. Now, question without notice. Yep. Have, can you give me a, an example or story where you've taken over a, a client who's been through the auction process, have moved across to you, you've gone into open offers and let's just talk, talk it through in, in what happened at the auction?
to where it ended up through you in, in, in open office. Yeah. So we've had, well, we had one for a, a unit in service Paris, 300 unit surface went through the auction process with a different agency. I think the reserve was 1. 4 million. They did a four week campaign. The highest offer at auction was 1. 3. So about a hundred thousand under reserve.
That agent was trying to pressure the client to drop the reserve down to 1. 3 and sell it. The seller stayed firm. They said, no. 1. 4 or we're not selling. Then, there, that listing engagement expired. They contacted us. I said, let's, okay, you've done auction. That didn't work. Let's try open office. And these are the reasons why.
Because of the, the auction part of it, they were a little bit sceptical. But I said, yeah, but you only had 10 We're going to open up to 100%. Start afresh. That one we ended up selling in six days for 1, 780, 000. Wow. So we got 380, 000 more. And with the method of sale and the marketing, we actually didn't take one single person through that property.
Wow. So it was all done online, virtually. We had buyers from Sydney, Melbourne, Brisbane. We had one person from overseas, I think it was London. All placing their offers online, 24 7. Sellers knew where it was at, and we did it in a week. Wow. Didn't show a single person through the property. Wow. And 480, 000 more.
Now, for anyone listening who's listened right through to this point in the, in this episode, you probably don't need to even hear the answer to this question, but I'm going to ask it anyway. Brad, for sellers listening who are considering an auction, what's the one piece of advice you'd give them before they lock in their decision?
I would say, call me. Make a smart decision. Make a smart decision. Give me a call. But also just You know, have a chat to somebody. It doesn't have to necessarily be me, but anyone that's registered and licensed to offer open, just so they can have a, just understand that process and see if that's the right fit for them.
Cause generally I can almost guarantee they will definitely get a higher price using the open offers method. Just because when you think about it, having 100 percent of the buyer pool versus 10%, you're gonna get a higher result. Absolutely. Look, some serious food for thought there. If you've ever assumed that an auction guarantees the highest price, hopefully today's chat has given you a bit of a different or another perspective.
The reality is Auctions aren't as transparent as they seem. They do create emotional pressure and they can shut out a huge portion of potential buyers. Brad, thanks again for sharing your insights. If anyone listening does want to learn more about the open offer method and how it could, you know, work for their property, what's the best way to get in touch with you?
Just give me a quick call on 0408338605 or send me an email to brad at smartrealestate. com. au And of course, your website is www. smartrealestate. com. au and look, that's a wrap for another episode of the Smart Real Estate Podcast. If you found this episode valuable, and I know I certainly did, be sure to subscribe, leave a review and share it with anyone who's thinking of selling their home, especially if they've told you they think auction is the best way to go.
Thanks for tuning in and we will see you next time. Thanks so much, Brad. Thanks Adam. Thanks for tuning into the Gold Coast Smart Real Estate Podcast. Remember, if you're thinking of selling, be smart. Explore your options and consider the power of open offers method of sale to maximize your result. Don't forget to subscribe so you never miss an episode.
And if you found today's insights helpful, feel free to share with a friend. Until next time, happy house hunting.