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The auction floor can be a complex environment, but certain dialogues and questions help all parties work towards a positive result on the day.

In a recent REINSW webinar, experienced auctioneers Jesse Davidson and Clarence White discuss the importance of conversations with buyers, vendors and agents before and during the auction.
 
“People want to learn how to negotiate to the best of their ability and negotiate in a way their owners get better results and the buyers are walking away from the auction not feeling they were pressured, but they were guided through a difficult process,” Jesse said.

Pre-auction conversations

 
Jesse and Clarence outlined three key pre-auction conversations for auctioneers and some worthwhile questions/discussion points, depending on the circumstances:

Conversations with a buyer

1. “What do you want to achieve and why?”
2. “Are you prepared to make an opening offer today?”
3. “If I call for an opening bid at ‘X’ level, would you feel comfortable getting started today?”

Conversations with the vendor

1. Explain how the auction process works and ensure there are no surprises on the day.
2. Empower the vendor with the knowledge that they will make all the final decisions.
3. “What would you like to do if the bidding falls short of where your expectations are?”

Conversations with an agent

1. “What is the reserve price?”
2. “How many bidders are you expecting?”
3. “What is the strength of those bidders?”
4. “What are the price indications from those bidders?”
5. “Have the bidders made any pre-auction offers?”
6. “Where would you like to see the bidding start?”
 

Auction floor conversations

 
A number of different scenarios can play out on the auction floor, so auctioneers often need to use conversations and dialogues to maintain momentum.
 

Calling for opening bids

“Some of the dialogue we use as auctioneers is typically around that your opening bid, worst case scenario, gives you the first chance to have a chat to us straight after the auction,” Jesse said.  
 

No opening bid received

“If you call for an opening bid, and get no bid, part of my dialogue at that point would be to underline for your buyers that one of two things are going to happen for the highest bidder: we sell the property under the hammer, or we afford the highest bidder the exclusive right to negotiate with us after the auction,” Clarence explained.
 

One bidder scenario

“As the auctioneer I’d be saying things like, ‘it wouldn’t be a surprise to know that I don’t have authority to sell it to you at that level, but my recommendation to you is that you strengthen your grip and put yourself in a position to own the property today in the transparent environment of the auction floor, but it will require an increased offer,” Clarence said.

Watch webinars on demand

Watch previous webinars REINSW has held, including many on auctions, here.