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Now that auctions are currently no longer a “walk in the park”, we have the opportunity to demonstrate value beyond the transaction during the auction process.
Now we can lament about elements outside our control, such as interest rates, the weather and the increase in stock, or we can improve elements of what we do to increase the probability of success. Or, at a bare minimum, show our sellers that we are taking steps to fight the changing tide.
And as for buyers, without denying what is going on in the market or trying to pull some script from the ’90s, we need to utilise the auction process to recreate that level of urgency to make them get off the fence and take some action.
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Below are seven things that you might want to add to your arsenal!
During the campaign:
- For buyers, creating some form of urgency is becoming increasingly difficult, and there’s way too much noise in the media to deny a decent amount of their logic. But that’s where we need to switch our conversations with them, altering from the realm of reason to a place of emotion, namely that one emotion that affects us all — regret. For those buyers who are non-committal about attending an auction or writing an offer, try using this: “Spend 20 minutes finding out for yourself, or risk living a life of regret when you find out afterwards that you could have got it at a level you’d have been happy with …”
- By providing that perspective, highlighting that the only cost required to avoid that regret is 20 minutes on auction day, then you are giving them little reason to attend. So irrespective of whether they think they’re light on budget or simply “playing the game”, chances are you’ll see more registrations off this one script alone.
- For sellers, you must make sure that your weekly meetings have a strong structure to them to ensure that not only is buyer feedback as detailed as possible and with every buyer accounted for, but that you have enough information about any comparable new properties that have come on, as well as any price changes on competing properties. We know that buyers will be looking at the market in the same way, so we need to play that out with our sellers so that they understand the full landscape from both sides.
- For the campaign, the focus of the team must be on finding bidders, not just buyers. The temptation is to accept an offer prior to the auction, and if any of the agents in the office drift away from the official line, then that could be a concern. Now, if an unconditional offer comes in at a fantastic level, then, of course, don’t dismiss it, but if buyers are asking if offers are being considered prior to, then we need to mention that transparency is what the sellers want, and so if they put an offer in, then we (agents) would have a duty of care to let everyone make an offer.
The problem for the buyer? That puts them into competition — without said transparency — not ideal for them!
On the day:
- Everyone needs a role to play on the day! Activity breeds activity, no more so than at an auction, and you need to go out fully committed to the event, irrespective of what your expectations are. Not only is that important for the seller to see from inside the home, but neighbours (of which there are a lot right now) that are trying to get some sort of a handle on their asset’s value, so the energy you put out will act like a billboard to your future clients!
- Be careful with your seller/vendor bids! Fine line between casting the net far out enough and leaving yourselves way too short with these, particularly if you’ve only got one bidder. You might want to consider placing the bid towards the top end, and from there …
- Selling the “right to negotiate” is imperative, both during and before the auction, if you want people to feel that it is in their interests to bid. Having a link to the relevant part of your legislation available to send out would be advisable in this case, too; that way, they’re not tempted to ignore it as much.
- Don’t be afraid of a “one-bidder” auction. After all, you’ve only got one house to sell to them anyway! In these instances, you must show a degree of confidence in the value of the property. If you show any level of desperation, you could be facing a losing battle, but it’s safe to say in most cases that conditional buyers will arrive, so the head start that unconditional buyers have on them cannot be wasted! Don’t necessarily aim to sell it under the hammer, but set it up so that the negotiation is starting from a much closer point. Be upfront, place a higher vendor bid and broadcast that conditional interest will be on its way. Offer the bidder to “match it or beat it” to win the right to stop any other buyers from being entertained and put the initiative back on that buyer to at least enter negotiation with your seller at an appropriate level.
Andy Reid is an auctioneer and the director of Sold By Group.
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