It’s been getting a bit more challenging at the auction day coalface lately. There are more auctions with fewer bidders, some without any bids at all, and plenty of awkward moments when a seller looks you in the eye asking, “what just happened?”
There’s immense pressure on a lot of agents to drop the hammer at all costs. However, this is where we need to recalibrate our perception of what an auction actually is, the role it plays in the process and how we present it to our sellers.
Because if we can switch some of that wiring in both our minds and that of our clients, then it can present as a tremendous power irrespective of the outcome.
What is an auction designed to do?
For most agents, the answer to that is to sell the property, and like any method of sale, that is obviously the aim of the campaign. However, the same can’t be said for the auction call itself.
The transparency of an auction was always designed to ensure that the seller was maximising the value of their asset. Now hopefully, that is brought about by engaging buyers into an emotional tug of war via that ultimate fear of loss, but if that isn’t there, then how can we tell the seller that dropping the hammer is the right thing to do??
The reality is that for most auctions, the outcome is determined by the strength of interest in the campaign, not by some random miracle on the day, and the natural anxiety that a seller has is based on “how much will I get for my property” from the day that they decided to sell.
How we can use the ‘weakness’ as a strength
We continue to attach our egos to the outcome as opposed to focusing on controlling the controllable. The key to how we use any method of sale relies on our comfort levels around their vulnerabilities and using those vulnerabilities to create a level of transparency that is undeniable.
For every day that a property isn’t sold, all the sellers look for is progress. This is where an auction can provide a clear advantage, even if the auction ends up with no bids.
Removing unnecessary anxiety
As I’ve mentioned before, anxiety is created by the fear of the unknown. Our job is to provide solutions and remove as much of said anxiety as possible, with the only part we can’t remove being the unknown of what the market is prepared to pay.
The reason that sellers fear not selling at auction is that they don’t truly understand that the auction can be leveraged by setting up the next stage of the selling process.
The best way to do that is to show and explain the plan for ANY eventuality that may happen. Now, that doesn’t necessarily mean that you’re showing a lack of ambition or confidence; it shows a higher level of professionalism and control over a process that both sides already know isn’t infallible.
That includes talking through what might happen at an auction and how you will roll should no one bid. Explain how you are going to set the conditional buyers at the start gate should the property pass in, set the bar publicly via a vendor bid as to the starting figure to be put forward and highlight the energy that you’ll be representing the home with and give sellers that sense of progress that they need.
Agents and auctioneers aren’t defined by the easy outcomes
Let’s face it, any old auctioneer and agent can “look good” when an auction goes well. The true professionals are the ones who can handle adversity, and the adversity that you may face right now is the loss of market pressure on buyers.
So, you need to use the tools you have to try and recreate that pressure, because unless you price a property at a crazy-low level, then a private sale isn’t likely to cut it in most cases.
Time pressure creates urgency, so from a marketing perspective, setting an auction date may at least make buyers make a decision.
I do hear your concern — there aren’t as many unconditional buyers kicking around, but you can use the third stage of an auction (post-auction) as an opportunity to create pressure on the conditional buyers (which there will always be some at a certain level).
By using the auction date as a “start time” for their race to success, you can set your properties up for another wave of pressure that will assist in creating that competition required.
After all, desirability tends to rise when they want what they can’t initially have, so we need to use that in case we don’t get it done under the hammer. Tell conditional buyers to be ready to make an offer, or better still, use an online platform to alert them immediately.
Any process has its strengths, but stressing out about not having a bid is not an option for you as a professional, because if you have true control over all of your tools and methods, you should be able to control the controllable and give your sellers a fighting chance of advancing their lives.
Andy Reid is an auctioneer and the director of Sold By Group.