Everyone focuses on the auctioneer! Everyone thinks that it is the 7-10 minutes that an auctioneer stands on the podium that is important. Though the behavior of the auctioneer is important, there is more to a successful auction than the person who calls the bid and the guy who lowers the gavel.
An auction is a bit like lovemaking! Without the courtship, the foreplay and the participation of all, the process merely reaches a climax without satisfaction. An auction requires a number of things to occur if the vendor is to be satisfied. Most people think the vendor is satisfied once they receive a good price. Yes, this is extraordinarily important. However, it is vitally important, in this market, that the vendor feels satisfied with the conduct of both the agent and the auctioneer. With the clearance rates dropping, the agent and the auctioneer team will come under criticism for failing to reach peak prices. It is therefore important that the process is professional, skillful and certain of a good result.
There is a six-pack to conducting a good auction:
- It is a team sport: The auctioneer is like the tennis player, playing solo and working his or her magic to get the best result. We often don’t see the team behind the tennis player to make them successful. Jokovich was at his best when Becker was his coach. The auction team is vitally important. It includes the agent, the auctioneer and the penciller.
- Isolating the truth: In the current market, open houses are the avenue of introduction to a property. Unlike the old days, agents don’t put prospective purchasers in the car and find out what they are wanting. We hope to know, from a snap conversation at open houses, and the regularity of attendance at the open houses, which individuals are most interested in buying the property. It is important that the agent identifies who the real buyers are and who are merely the observers, prior to the auction. Moreover, considering that auctions are done in such random locations, it is important that the agent on the floor ensures that the auctioneer is able to focus on those who are truly interested in purchasing the property.
- Auction and Agent collaboration: Auctioneers and agents should meet prior to an auction. It provides an opportunity to do the following: a.Determine the key aspects of the property, which may lead a person to purchase;
b.Identify the truly interested buyers;
c. Determine strategy for the day of the auction; and
d.Review the contract to see if there are any important points, which need to be highlighted at the beginning of the auction.
- Vendor’s meeting: The agent and the auctioneer should meet with the vendor prior to the auction. Often these meetings are held only between the agent and the vendor, but it is important that the auctioneer is dialed into these conversations. The vendor’s meeting is about setting the reserve and determining how to use the vendor’s one bid. It is important that the agent and/or the auctioneer set out the purpose of the reserve to the vendor and take clear instructions regarding how to manage the vendor bid. Remember, the auctioneer and the agent are the professionals, and vendors come across this pathway rarely in their life.
- The penciller: the penciller is the person who keeps the bidders record. They are important to the auctioneer so he/she knows what was the last bid. This is a vital part of Auctioning. In the past 12 months, Leverage has had the difficulty of advising clients in circumstances where the auctioneer got the bid incorrect. This can lead to litigation for the auctioneer and can cause loss of faith by under bidders in the agent and the auctioneer. Due to the new trend of promoting auctions and live streaming, these mistakes can become incredibly obvious and well known. The penciller is there, not only to write down the number, but also to ensure the auctioneer gets it right.
- The agent: A good agent makes a good auction. I know the auction community would like to believe it is them that create a good auction, however it is the agent who ensures that the auction reaches its climax. A good agent needs to be well prepared, have contracts out and needs to identify those who are really interested in purchasing the property. Now the agent takes the floor to continuing to be in touch with those who are bidding and ensuring that those bids are clearly identified to the auctioneer. They are also to ensure that no bids are missed. It is their preparation, their knowledge and their continuous use of their knowledge of the purchaser, which creates a great auction.
This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.
To get in touch with Bailey, please email firstname.lastname@example.org or call 1300 438 538