The Warsaw office of Colliers International thinks it has found a way to boost residential sales in Poland. Together with US real estate auction company Rick Levin & Associates, the agency is preparing to launch residential property auctions in the coming months.

So far, residential developers haven’t been rushing to offer their homes up for auction, but the agency is convinced developers are anxious to increase the sales pace and reduce the carrying costs of unsold inventory – albeit at lower prices.

The idea is dead simple, says Paweł Hardej, head of Colliers’ new auctioneering department. Developers and individuals will offer their completed flats up for auction. Anyone who pays the necessary guarantee can take part in the auctions, with the size of the guarantee varying depending on what’s being offered. Then it’s a simple matter of awarding the flat to whoever bids the most. Auction winners will be assisted through the process of finalizing the purchase by the auction’s organizers, for a fee.

Hardej hopes the auction sales will prove more attractive to customers who are otherwise at the mercy of developers. “With auctions, everything’s clear about the price. A developer can offer a discount of 15 percent to one customer who, however, will never be sure if an identical flat wasn’t discounted by, say, 18 percent the day before,” he says.

This suggests, however, that asking price at an auction will start with heavy discounts, which he hints could be as much as 40 percent. Auction participants thus have much to gain, and nothing to lose but their time.

CIJ spoke to some Polish developers who had reservations about the new sales tactic, but Hardej says it’s too early for them to embrace the idea with full enthusiasm. He adds that Colliers is now talking to international developers who are experienced with auction property sales in other markets.

Colliers and Rick Levin & Associates will also benefit. Both companies will make money from commission paid by both the buyer and the seller, in return for assistance with deal finalization.