In-person bidders create better social proof on auction day

The unspoken internal thought process is “Well, if other people here think this property is worth this much, then it must be worth it.” The intrinsic value in running an auction is that the price intentions of buyers actually grow once they see the social proof of competition.

Competition is leverage. We want to leverage competition to maximise price.

When you consider the value of a telephone or online bidder versus the value of an in-person bidder on auction day, there’s really no comparison. Don’t make the mistake of thinking they are the same thing; they are not.

Have you ever tried to run an auction with two bidders, one of whom was bidding via telephone and the other who was bidding in-person? Clunky right?

In-person bidders are naturally suspicious about bidding against telephone and online bidders. Not being able to see the other buyer defeats the very social proof auction day is designed to create.

The in-person bidder inevitably wonders, “Is there a real person on that phone or are they just running me up?” The actions of an in-person bidder can become tentative in this situation.

By having remote buyers not physically present, you rob the in-person bidder of the social proof they desperately crave to bolster their confidence to bid, buy and pay more for the home.

Auctions work best when they are open, fair and transparent; this kind of environment builds buyer confidence to engage and bid. My advice? To maximise social proof on auction day and therefore maximise the willingness of buyers to engage and bid, put all your bidders physically in the one place.

Agents should do everything in their power to try and get every bidder there in-person.

Telephone bidding and online bidding should be a last resort in exceptional circumstances where it really is impossible for a buyer to be physically present.

There’s also another good reason why ensuring all bidders are physically present on auction day is important.

Across my 13-year and over 7,000-auction career, I can tell you with absolute certainty that telephone and online bidders are far less likely to bid than in-person bidders. Removal from the physical environment of the auction enables remote bidders to remain emotionally detached.

Inevitably, remote bidders act in a way that exemplifies their detachment. It’s easy to sit there in the comfort of a home or hotel room and do nothing. The remote bidder is not there feeling the anxious anticipation, feeling the energy in the room, experiencing the gaze of the auctioneer, being swept along by the competitive tension of other buyers.

Usually the only channel of direct communication between the agent and a remote bidder is a telephone conversation, far less compelling than being able to engage the buyer face to face. So it’s easy for the remote buyer to remain detached.

Agents who optimistically expect an online or telephone bidder to bid with as much intent as an in-person bidder are often disappointed.

To be clear, I am not saying remote buyers can’t play a valuable role; they can and, with the right preparation, motivation and handling, sometimes do, but the odds are far more in your favour of achieving meaningful action from a bidder if you have them physically present at the auction.

My second piece of advice is to stage the auction in a location where everyone can see everyone else. No posts, no pillars, no hiding round a corner. We literally want buyers to be able to see the ‘whites of the eyes’ of their competitors. When a bidder can see and hear another genuine buyer with their own eyes and ears, that’s when social proof is at a maximum.

For on-site auctions, if the weather is fine, a yard is often desirable, provided the yard offers an open, clear, unobstructed space. If the set-up is better or if weather compels us to be inside, then a spacious open living area with clear sightlines will certainly do the trick.

Don’t worry if buyers and onlookers have to pack in a bit; that can actually create even more tension and anticipation as the energy of the packed room is palpable. Be sure to verbally encourage all bidders to stand where they can be seen.

For best results in any auction, do everything you can to get all of your bidders physically there in-person and stage the auction in a way that bidders can actually see each other.

Open, fair, visible, and transparent competition maximises social proof and nearly always creates the best opportunity to maximise price.