How can you get the most out of your relationship with your auctioneer?
“Going once, going twice, sold.”
If only all auctions were this simple. You turn up, all the bidders bid, and the sale price exceeds the reserve. However, it takes a lot of work behind the scenes to achieve such an outcome. A good relationship between agent and auctioneer is key.
So how can you ensure you get the most from the relationship with your auctioneer? The Journal talks to auctioneer David Gray and agent David Nolan to get their advice on how best to manage the auctioneer-agent relationship before, during and after auction.
Auctioneer at Auctionworks
What information do you require from agents in advance of the auction?
I have a set of questions that I ask:
- How is the campaign going?
- How many buyers are they looking to register?
- What have the offers come in at?
- What does the agent think the property is worth
- What is the reserve price?
- What is the lowest bid they will accept?
We can then design a strategy around the vendor bid. This information makes me 100 per cent prepared to know how to handle the auction.
How do you read the audience during the auction?
It is all about body language, buyers’ personalities and the way they conduct themselves. A great auctioneer will be able to build quick rapport with the audience by their presentation, knowledge and the way they conduct the auction.
It is then the auctioneer’s job to understand that all buyers are different and to be able to handle each buyer individually to get the best price. For example knowing when to raise the tempo, calling the property, creating pressure and use of silence.
Nervous buyers can be fairly easy to identify. Some things to look out for include:: Are they fidgety? Do they have their bidder card ready? And, watch the emotions of their partners. They often give them away. Also, before the auction, are they pacing up and down?
Two big tips for sales agents during the auction?
Concrete feet: One of the biggest things inexperienced agents do is what I call ‘concrete feet’. This is when they stand next to you and do not move during the whole auction. Good practice is for the agent to move around the crowd and talk to people. Activity breeds activity.
Break rapport: Often agents can stand between the auctioneers and the buyer, breaking your line of eye contact with the bidder so you lose rapport and rhythm. The agents should come up behind the bidder to talk to them to avoid this.
How important is it to have a good relationship with the sales agent?
Probably the thing I love most about auctioneering is the relationships you build with your agent. All agents conduct auctions differently. It’s about getting to know your agent, their style and what they like from their auctioneers.
This article was first published in the July 2013 edition of the REINSW Real Estate Journal.
Director at Webster Nolan Real Estate
What do you do if the property information changes before the auction?
We are very careful to make sure that if there has been anything come out during the marketing campaign that is critical, and as a result there are amendments to the contract, then the bidders are made aware of this as soon as possible. We also instruct the auctioneer to make an announcement before the auction starts. We do not assume anything.
What is the agent’s role during the auction?
You liaise with your clients, potential bidders and the auctioneer during the auction. I think a lot of agents can get too anxious and too overzealous in convincing people to bid and I think it can put people off. There’s a fine line between convincing someone to bid and driving someone mad.
If the bidders are a long way away from the end result we let them know that. If they are very close to the reserve then we may encourage them to increase their bid. I always say that an auction is like a game of football. The best-laid plans can change very quickly so you have to think on your feet.
Is it important to have a good relationship with the auctioneer?
I think a lot of agents and auctioneers do not have good relationships. I don’t believe agents understand the importance of the day whether the property sells or does not sell. Agents tend to rely on the auctioneer to be a magician.
We like to have our auctioneer fully briefed as if they are part of the sales team.
What makes a great auctioneer?
A great auctioneer is someone who understands the product and the psychology behind why auctions work. They understand the instructions they are given by the agent, they relate well to the vendor ad can make an audience comfortable when they bid.
They are not there to challenge Seinfeld as a comedian, in fact, quite the opposite. They are serious yet calm and engaging with a little humour at hand if the situation requires.
They should also take a hint from Willie Nelson: “know when to hold them and know when to fold them”. There is nothing worse than an auctioneer banging on when the situation has become lifeless. This can actually damage a property’s value and put the buying public offside.
What advice would you give to young agents going to their first auction?
If I was a young agent, I would seek out a senior auctioneer and ask them as many questions as I could. The questions they should be asking: Why auction a property and what are the benefits to my client and to me as an agent? I would then watch the auctioneer in action and study what was happening in the crowd. You can learn a lot from watching the audience.
Do auctions always work?
Win, lose or draw, the actual day of the auction should not always be the prime focus. That is why auctions can get bad publicity, because if it does not sell under the hammer, people cry failure. When in fact it can be quite the opposite and the serious negotiation can begin with the serious parties who have been identified during the auction marketing period.