Embracing the pass-in

Interesting stuff happening on the front line of our fair industry right now! Lots more footfall coming through open homes, but a lot more indecision from our buying population, which is resulting in more properties passing in than has been the case for a while (despite what some of the reported clearance rates say … but that’s another topic altogether!).

For many sellers and agents, passing an auction in is like hearing a heart monitor flatline. It spells the end, and the subsequent energy that comes through as a result is akin to a mourning relative, with an air of regret hanging around like a bad smell. Agents start to worry about treading on eggshells, and they can’t wait to get away from the scene of the supposed crime!

Let’s state this as a fact: there is not one process that is guaranteed to deliver a sale. There’s no such thing as an undefeated auctioneer (unless they’ve only called a handful of them), and any agent that has been in the industry for more than a few months has likely had to let go of a property that they’ve not been able to sell.

So in acknowledging this, if we are to be able to use our tools and strategies to the best of their abilities, we need to be better equipped for any outcome in both our knowledge base as well as our mindset. And with a couple of alterations in both of these, passing a property in can become a tremendously powerful asset.

Why do we fear the pass-in so much?

There are a number of reasons, and very few of them (if any) have anything to do with the customers! Their only worry is getting their place sold so that they can move forward, so passing in should tell them that they may need to address price expectations. But what about us agents?

1) Our third stage isn’t robust enough. Most of the time agents simply limp into a private sale in the hope that their fortune will change, without prior structuring with the client as to what needs to change in order to improve the probability of an outcome.
2) The delivery of the pass-in is weak. Auctioneers need to practise this a lot more! It’s inevitable, and the more smooth that final piece is, the more confidently the team can move forward.
3) We don’t feel comfortable discussing ALL potential outcomes. It is our job to be optimistic and to provide solutions, so in that need to show belief in our solution, we can shy away from talking about what happens if it doesn’t work out (potentially damaging our credibility).
4) Fear of public judgement. The BIG one … our own ego. Because no one wants the public to think that they failed in case it damages their brand.
5) We don’t like to lose! We are competitive beasts after all!

Now, I can accept that our competitive streaks are a healthy thing – we need them in us if we want to remain driven to go as hard as we can, but the other four reasons above make no sense if we accept our prior statement that “nothing is guaranteed”. So what can we do to help to remove the anxiety of not shouting “SOLD” at the end of our auctions?

Beefing up your third stage (or even having any plan around it) is the first thing you need to do. If you have greater structure, you’ll have more belief and you’ll be able to convey that to your clients. Critical elements to add are:

a) “First priority list” – During your auction campaign, we always meet conditional buyers, but we need to create urgency and exclusivity with these buyers by asking if they’d like to register as a first priority should a property pass in, guaranteeing them to be one of the first conditional buyers to get a chance to make an offer. Reporting this to your seller is a really good idea too, so that they feel like you’ve got all bases covered (and therefore pay more attention to you on the day by the way!).
b) Agreement on any price changes/advert alterations beforehand – Not only will this bring a sense of reality to sellers, but it will also allow them to see the path moving forward which will remove anxiety brought about by the fear of the unknown. This needs to happen even if you’re confident of a sale to assure the owners that you’re a professional outfit that has prepared for any eventuality.
c) Reporting area results to sellers BEFORE they report to you! You know that sellers will be having a look, and if any around them have sold, they’ll look at you sideways! So you’re better off if they hear it from you as a part of your process post-auction.
d) Refer to the pass-in as “The Benchmark” – Delivering the pass-in as just that can feel like defeat, but we need to put the energy out there that we are moving forward with purpose. Finalising the auction by declaring that you are “setting the benchmark at…” gives a healthier impression that you are entertaining offers OVER that amount, which feels much better for the seller and gives you a bit more strength after the event.
e) Creating a second wave of competition – By articulating to sellers that your third stage is designed to create a second wave of competition, then they’ll feel like you’re giving them two bites at the cherry. Using an online offer platform can be an amazing tool to help demonstrate this, because they can help you to generate fear of loss between all buyer types.
f) Set time frames for progression – merely saying, “We should see offers in the next two weeks” isn’t good enough; set a couple of deadlines for things to happen, e.g. “By 5pm Monday, we’ll know if any unconditional interest is coming through, and by close of play on the following Sunday, we will have a strong idea as to the conditional interest at the current level.”

Some of you will possibly be doing some of the above already, but your mistake will likely be that you don’t articulate this formally with your sellers prior as a firm part of your process.

After adding these into your process, there’s one other thing that you need to do: STOP worrying about yourself so much! You’re not perfect, but being able to put a structure around the imperfections of your process makes you much more qualified, way more professional, and way more attractive to customers as an agent.

Because the one thing that these somewhat useless clearance rates do provide to customers is the knowledge that nothing is guaranteed … but as we said before, you already knew that, right?! ;)

Andy Reid is an auctioneer, podcast host, coach and speaker.