How much money is being left on the table?

Agents and sellers do not realise how much money bad-to-average auctioneering is costing them right now!

I’m sure that we could all agree on this: the skill set required to be an effective auctioneer is rather different to that of a salesperson. It requires a much greater level of focus to own the craft in order to be executed as effectively as is required if we are to maximise the value of each auction, both for the owners and the agency.

And on the day there are a lot of hats to wear that require regular changes in tact towards individuals within seconds, so handling the campaign, the sale and the auction is tremendously risky.

But where is this money being lost exactly?

Areas of concern at auction

Obviously there’s the sale, which brings the owner an outcome and a commission for the agent, and if it sells then the fanfare of the sale will be OK during that momentary twitch of melatonin.

But if we break down the auction at various key points, it’s easy to highlight how critical it is that you partner with the best auctioneer you can.

Pre-auction – It is vital that your auctioneer connects to find out the story of the sale. The agent and auctioneer need to be on the same page before auction day because any future communication (particularly during the auction) depends on how much involvement the agents want the auctioneer to have, and that needs to be sought after by the auctioneer so that they know how much support to provide.

As agents, you want to make sure that you’re talking optimistically about the process without being deluded. As the auctioneer, we need to make sure the seller feels comfortable that the agent has the whole thing under control, irrespective of the outcome.

If an auction doesn’t bring the immediate result, then a good auctioneer can help the agent to allow sellers to have the correct perspective moving forward that doesn’t indicate “it’s the agent’s fault!” A “pass-in” isn’t to be feared, but if your auctioneer isn’t articulating this properly to your sellers, then it makes for a very bumpy road after the event.

Also, any good auctioneer should be able to bring a subjective voice around the reserve conversation, providing the seller with a better explanation as to the mechanics of a reserve and the theoretical use of it when trying to make as much out of the asset as possible. This becomes really handy if the “on the market” chat needs to happen mid-auction.

At the start of the call – First impressions count for a lot! Way too many standard auctioneers either make it about themselves, or begin with an air of arrogance that instantly makes the crowd feel inferior. Aggression at the start is also a fast way to put buyers off, as is the lack of ability to engage directly with potential bidders during the opening monologue (the rules and contract part).

Critically though for future business, if your auctioneer isn’t showing warmth to them, and/or isn’t connecting at the start, then any neighbours or onlookers (i.e. potential future sellers) will instantly switch off, making your chances of engaging with them down the track a lot more difficult.

During the call – As mentioned, the primary function is to get the result, however if your auctioneer isn’t at least doing these things when required, then they aren’t helping your cause, or your seller’s.

• Rejecting lower increments. Early on we need to get the figures as high as possible, as quickly as possible, so if we’re in $25k increments early on and someone offers $5k, then your auctioneer needs to challenge that. If they just accept it, then not only can you almost guarantee that the auction will stop short of the target, but it shows a distinct lack of backbone to protect the seller’s interests … not a good message to send to the current seller or to future clients.
• Engaging with on-lookers. A great strategy that helps to buy agents time is to engage with members of the crowd who aren’t directly involved in the auction. Not only does this give the agent the space to work on buyers, it also engages neighbours and adds colour to the personality of the brand, which makes the auction more effective as an overall statement.
• Understanding the agent’s body language. Auctioneers need to understand their agent’s movements because it helps them to know when they need to slow things down in order to buy some time.
• Giving subjective feedback at the break. Great auctioneers can be the bad cop without being bad. They can deliver a reality check without encroaching on the agent-seller relationship, which helps both sides to face the inevitable. This isn’t as easy if your auctioneer hasn’t sold many houses themselves … hard to have empathy if you haven’t had some experience with it yourself.
• Recommending higher increments. Especially towards the end, the lack of ingenuity with this in the industry right now is shocking. The end result can alter significantly if auctioneers would just ask for more money than what is currently being bid – there’s way too much order-taking going on right now! And the difference in the end result can be life-altering for the seller, as well as reputation-boosting for the agent.

At the end of the call – if your auctioneer isn’t celebrating your success or making good out of a tough spot, then like a bad dessert it can kill any pleasant experiences you’ve had up to that point.

If it sells, then the auctioneer should be recognising the agent prior to knocking the property down, and ensuring that they have the limelight. There should be an effort made by the auctioneer to thank unsuccessful bidders, shaking their hands if possible once the auction has concluded.

If it doesn’t sell, then good auctioneers know how to bring things to an end without it feeling like a train wreck. Refer to a vendor bid as a “benchmark bid”, meaning that offers after the event need to exceed that mark, and auctioneers need to have an energy of “the story has progressed”, making sure sellers, buyers and any onlookers feel that the agent is still in control. Lots of auctioneers are letting their agents down with this, leaving a sour taste in the mouths of all who are present.

So why is this something that a lot of agents tend to miss?

The basic Plan A of an auction is to get a deal together, and so understandably the primary focus for the agent (and therefore auctioneer) is functionality, i.e. can the auctioneer say the right stuff loudly to get the job done legally?

There’s plenty to focus on: keeping the seller focused and the reserve on point, maintaining buyer engagement and ensuring contracts/legalities are all ticked off and present, and getting the assisting agents to provide appropriate help.

On top of that, there are possibly egos at play – some people can’t see the damage they’re causing the agent and/or the agency, not having the wherewithal to step aside for the greater good of both customer and brand.

But what is very obvious is that what I’ve mentioned above are differences between a functional auctioneer and a professional auctioneer that can not only influence the quality of the outcome on the day, but also create a much better lasting impression that generates future opportunities.

Your brand is on display for very public judgement, with serious ramifications on your reputation (positively or negatively) that can make or break your momentum, so your auctioneer selection is way more critical than simply to get the job done on the day.

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