Should we be withdrawing properties from auction?

This very conversation raises a fundamental flaw in the way that we prescribe our solutions to vendors within our industry, on top of highlighting inherent concerns whenever we have a market shift.

Prescribing medicine BEFORE hearing all of the symptoms

I was speaking to an agent who is in great form right now, and he wanted my take on whether he should shift to auction mode. He’s a million-dollar agent as it is, brilliant in his role and has a fantastic crew with him.

But he was quite conflicted because at a recent training session, he had been told by a prominent trainer that he needs to “auction everything”, and he felt quite uneasy about making the shift.

I asked him this question: “Does a doctor go into a waiting room and prescribe all the patients with the same medicine before hearing their symptoms?”

“Of course not!” he replied.

“So why on earth are we predetermining our advice before we’ve heard the circumstances and history around the motivation for selling?

“Chances are that you’ll prescribe the right medicine for some of the patients, but you’re likely to make some feel ill too if they take the wrong pills!”

It wasn’t the auction process that concerned him. I’ve auctioned plenty of his properties with success. It was his own intuition because he knew that he needed to listen to vendors before making that recommendation.

Now that’s not to say that an auction isn’t the right way to play in the majority of cases — if you pay attention and afterwards decide that within the context of their situation, that auction is the right way to go, then great.

But going into listing presentations with a predetermined agenda as to the course of action required without listening to the vendor is not likely to help create a solid connection. If you want to have vendors work with you (which is handy if you need to adjust your price during the campaign), then you may want to pay attention to them and make them feel like a part of their own team from the outset.

Inherent fears about the auction process in this market

The main concern is that the auction doesn’t sell under the hammer, and/or that you don’t get many registrations.

Whether it’s ensuring that vendors are in the right frame of mind around price or navigating buyers around their concerns about overpaying, these concerns are largely the same as any other method of sale. There’s no such thing as a guarantee in any process, and the client concerns apply just as much to a private sale as they do to an auction.

Who’s making the decision — our awareness or our ego?

To clarify — I’m not necessarily proposing that you should recommend an auction for every client, but you do need to try and apply a level of pressure to buyers, and you all know that meandering onto the market in the “hope” that the price is right is just as much of a risk as anything right now.

Currently, we need to be as pragmatic as possible, and because it’s gotten slightly harder at the coalface, we’re hiding behind private sales as opposed to consciously making the decision to recommend auctions based on buyer indifference.

Why do I say that? Because that’s what a lot of agents are telling me, so instead of blaming market movements for shifting away from auctions, let’s perhaps have a look at why that might be.

Egos protect us from what we don’t know, but they really can get in the way of transactions. I say this to auctioneers as well as agents — our ego has no place in a transaction, and if it does, then you’re more concerned about yourself than you are about your client.

We pay too much attention to clearance rates when on the front line

Clearance rates serve as a very general indicator, but they bear very little importance when it comes to individual vendors. Ultimately, property sells well if it’s pitched to the market well enough and there’s a strong collaboration between agent and vendor.

We put way too much importance on the hammer falling

Not one method of sale is guaranteed to bring an outcome, and yet we’re very much “white knuckle” (i.e. holding on way too tight) about it happening on auction day. It’s just a process, not a guarantee, so if you articulate that with your clients from the beginning and make everyone aware that the auction will let you find out how much is available in cash (i.e. unconditional), then everyone’s on the same page and can think more objectively.

Put simply, if you’re running away from auctions, you need to pull your finger out and understand the processes you have available a lot better. That way, you can take your campaigns whichever way they need to go and you can prescribe the best medicine for your vendors, not just the same meds that you “hope” cure their problem!

Andy Reid is an auctioneer and the director of Sold By Group.