If you are considering introducing auctions to your agency – even if private treaties dominate your turf – then you’ll want to listen to these four experts. Each outlines to Real Estate Business what a principal and agent must do to successfully introduce an auction culture
JASON ANDREW, DIRECTOR, JASON ANDREW AUCTIONEERS
MARKET: SOUTHEAST QLD AND NORTHERN NSW
WE’VE ALL heard this old adage: ‘Whether you think you can or you think you can’t, you’re right’.
This is particularly true if you’re contemplating creating an auction culture in your business. With the most successful auction agents, it’s not what they do so much as how they do it.
A mistake many agents make in approaching auctions for the first time is thinking the process is similar to that of private treaty.
With private treaty, the agent’s job is to find the buyer and sell the property at a vendor-determined price. With auction, the agent’s job is to collect as many bidders as possible during a set time frame to create a competitive auction environment – all this while gathering and delivering to the vendor enough information about current market value to empower them to make a selling decision.
Put simply, with the first option the agent concentrates on getting a sale, whereas with the second, the agent concentrates on the selling process.
Once you’ve decided to embrace auctions, the key to success is in getting the right sort of training before you start to learn how to properly conduct the process. It’s interesting that if an agent has a positive experience with their first auction, they’re likely to become strong auction advocates.
The common catch-cry is ‘auctions don’t work in my area’; the truth is we work with highly successful auction agents in every sort of demographic and price segment.
There’s no such thing as a perfect process for selling property, but with auction clearance rates within 35 days sitting at around 50 per cent and private treaty 10 per cent, the auction equation remains compelling.
KATE LUMBY,DIRECTOR AND AUCTIONEER, MY AUCTIONEER
IN STARTING out down the path of marketing property by way of auction, the first thing an agent needs to have is belief. They need to believe auctions work, because if they don’t, it is very hard to encourage a prospective seller to auction their property.
Once an agent has managed and conducted around 100 auction campaigns, only then will they fully understand auctions. The real estate professionals in this league are amongst the best agents in Australia, and most of them are attraction agents who stand out in their market and enjoy good market share.
Principals and agents might invest in some training and development to work on their skills to be better prepared for marketing property by way of auction. They should know all of the advantages of [auctions] and the benefits of auction to their clients.
It is also very powerful to know the statistics of auction sales compared to private treaty sales in their market, so when presenting the option of auction to a prospective seller they can clearly outline the evidence. In a rapidly changing marketplace, agents who remove price, make the property stand out and attract unconditional buyers are finding auctions very effective.
Many leading agents and agencies directly attribute their business growth and increased sales to an increase in the amount of auctions they do.
Also, why not try running some auctions, because if nothing changes in your business, nothing changes.
In some markets there will be fewer auctions. In saying this, if you have a motivated seller prepared to invest in some marketing, auction is a great method of sale.
It is an option every agent should really be able to offer to their vendors.
BRETT ROENFELDT, DIRECTOR, BR AUCTIONEER
MARKET: SOUTH AUSTRALIA
THERE IS no doubt when you look at great auction-orientated real estate offices around the country they have not only developed an exciting auction culture with their sales people, but they have created outstanding systems and strategies. They use great scripts, dialogues and role plays.
From the listing presentation, the communication plan and the marketing campaign to the team’s approach used on the day of auction, they aim to deliver the best performances.
If they secure a sale before, on the day or in an adjusted market range that creates a sale within 7 to 10 days of the auction – still a fantastic result – at worst they halve days on market.
For the agency principal, this means ensuring every salesperson can demonstrate in a listing presentation the benefit of this system.
Great auction operators leave nothing to chance. Do your research, know what the days on the market are for your private treaty listing – and for those of your competitors. Then analyse auction listings, not only sales before and on the day, but how many were sold between 7 and 10 days after the auction.
Consider the power of this statement: ‘Our results show that [from] all the auctions conducted by our company in the last 12 months, 87 per cent of [properties listed] were sold in less than 40 days, against an average of 100 days for private treaty sales’.
Principals should engage the services of an auctioneer who can provide invaluable training for their team, coach them through their first auctions, [covering] what to say and what not to say. Do I quote price? Do I remain silent on price? – all critical aspects of the auction marketing strategy.
It doesn’t matter where you’re located, there is an opportunity to build an auction business.
JASON ELDRIDGE, SALES ASSOCIATE AND LICENSED AUCTIONEER, PEARD REAL ESTATE
THE FIRST thing a principal should do is build a strong case for why a sales agent might consider auctions.
The facts show us that the actual days on market for those properties being sold by auction versus private treaty are considerably lower by auction as an average right across the country. Facilitate a series of collaborative information sessions in which you establish what an agent’s own feelings and reservations towards auctions are.
The problem here in WA is that many agents don’t know what they don’t know.
I would recommend that you educate your agents by encouraging them to study the more successful agents. Have them observe their marketing approach and how they conduct themselves throughout their campaigns and on the day of the auction.
If it takes hopping on a plane with a group of agents travelling to various states – as it did with me – so be it.
Create appropriate tools and resources that help them present auctions as a sales option for their sellers, and that will assist them with facilitating successful auction campaigns.
Is there a reason why a principal shouldn’t introduce auctions to their agents? Quite simply, no!
Our role as real estate professionals is to provide property owners with all the selling options available for their consideration.
Places like Christie’s and Sotheby’s have been selling fine art, jewellery, antiques, collectables, cars, wine, stamps and rare coins for over a century. If our most sought after commodities are traded by auction – and often for record prices – then why not our most precious asset, our own home?