By Jesse Davidson – Auctioneer at auctionWORKS and REINSW Auctioneers Chapter Chair
As the market began to slow down in the latter stages of 2015, it became evident that the auctioneering industry would start to face its own challenges.
It is no secret that when a market is performing as well as it was at the start of 2015, that auctions become the preferred method of sale. Unfortunately the reverse can also be true, in that a slowing market can reduce the attractiveness of auction sales for vendors.
Whilst savvy agents will continue to promote the auction method to capitalise on transparency and a faster more efficient method of sale, it is likely that the overall proportion of sales by auction could decrease. Inexperienced agents with limited or developing knowledge of the auction process will struggle to continue listing auctions. In addition, as clearance rates fall, vendors may move away from the auction process.
Communicating the benefits
Agents need to communicate to their vendors that the auction process is a three stage process: you can sell prior to auction, at auction or after auction. An unsuccessful result on auction day is certainly not a failure.
As the market saw an incredible rise over the past two years, there was an influx of new auctioneers reaching out to agencies. This was extremely encouraging, as we saw our profession seemingly “on the map” in the real estate industry. However some of these new auctioneers were entering the market with little to no experience or no formal training to enable them to perfect their craft.
This limited experience went relatively unnoticed in the previous 12 months, as the market was incredibly buoyant. Coupled with record low interest rates and enormous capital gains, these conditions effectively created a perfect storm for capital growth and auction clearance success.
This current market is becoming the time where agents and agencies will begin to demand a higher level of experience and expertise in their auctioneer.
Building your expertise
Whilst the auction method of sale is still achieving a 60% success rate “on the day”, and almost 80% when you take into account post auction negotiations, the number of auctions are becoming a little tighter.
This is where experience and expertise will be telling. The ability to convince a purchaser to make a bid, the ability to read buyers’ body language, working with lower increments, knowing how to pass a property in correctly, and understanding reasonable starting points for auctions are all critical traits of a successful auctioneer.
If you are an auctioneer with limited experience, now is the time to engage in any and all training available to you. The next 12 months may prove to be more difficult than the past 12 months, but in the long run the experience you gain from a difficult market far outweighs that which you would have received throughout 2015.