Many people misunderstand the benefits of an auction. Handled the right way, auctions are a great way to sell properties. Mark Staples, senior auction coach at hockingstuart, highlights five points that go hand-in-hand with every successful sale.
1. A property with difficult-to-define value
Auctions typically work well if the value of the home is hard to define, because putting such a property to the open market helps set the right market price.
“An auction will never get you less than fair market price and always gives you the chance at a great price through the extra competition,” Mr Staples said.
2. A slow start
In the event that the reserve price hasn’t yet been passed, the auctioneer gets the chance to explain the benefits of bidding – as in, the highest bidder gets the prize.
“No real surprise there, but the bidders need to understand the power of the position the highest bidder is in. They get the exclusive opportunity to hear the reserve price ahead of all others,” Mr Staples said.
Mr Staples believes that assuming you’re going to have any bidders at all is a mistake, one that is often made.
He said auctioneers need to have a plan to deal with the different scenarios that can arise during an auction.
“This might be free-flowing bidding, bidding that falls short of the reserve, no bidding at all, or post-auction negotiations,” he said, adding that your client should always be aware of the possible scenarios and your plans for each of them.
4. Nervous bidders
The extra tension allows for transparency and it provides a platform to justify value and reinforce the benefits of bidding.
“Being open is really helpful because it removes the mystery and puts people at ease,” Mr Staples said.
He said the auctioneer is not there to fight the buyer, but to “encourage fighting between the buyers”.
This one is no surprise at all but it’s still worth mentioning.
Successful auctions always start by presenting the property in the best possible light to appeal to the most buyers.