When an auction starts and the auctioneer calls for an opening bid, only to be met with a wall of silence, the problem often stems from what was not said before the auction began.
What’s most likely happened is the agent hasn’t helped position potential buyers well enough or used effective ‘auction floor’ dialogue.
Fortunately, there are a number of ways you can improve your auction floor dialogue and overall communication, with the help of scripts to encourage an opening bid, entice more buyer activity and even manage vendor expectations.
Here are four ways you can use effective auction floor dialogue.
- Encouraging bidders to start the bidding
Getting the bidding started is often the biggest challenge at an auction.
You need to use dialogue that encourages buyers to take that crucial first step.
Before the auction, ensure you engage with potential buyers, know what they are looking for and, importantly, make sure they are going to be there on time, registered and prepared to bid.
During the auction, you can use various tactics to initiate bidding, which is normally based around showing a buyer the real value in the property.
One effective strategy is to set an attractive opening bid that is slightly lower than the property’s perceived value, which can help motivate an opening bid.
I’ll often use dialogue like:
“Your first bid doesn’t have to be your best, show me where you see value and let’s commence the process.”
Or
“Nothing to be gained from not making a bid, you only risk losing this property to someone who does make a bid.”
This type of dialogue helps position the buyers to make a bid at a level they feel comfortable with.
- Encouraging bidders to continue bidding
Once the bidding has started, you need to maintain bidder engagement and motivation.
Social proof can be a powerful tool in this phase.
Highlight the interest and participation of other bidders to create a sense of competition and urgency, which will encourage participants to continue raising their hand.
You can also share real-time updates on the bidding progress, showcasing the increasing value of the property and creating a sense of urgency among potential buyers.
Some examples of effective dialogue at this stage are:
“If you miss out on this one here today, what’s it going to cost you next time one like this comes around?”
Or
“If you miss out on this one here today, it may take you a long time until you get an opportunity like this again.”
Or
“Your competition is slowing down, another push may just secure you the property.”
- Encouraging bidders to increase their offer
Once bidding has started, but inevitably reached a point where the increments of the bids fall, it’s essential to employ effective dialogue to encourage bidders to increase their offers.
This phase requires skilful communication to create a fear of missing out, while highlighting the property’s unique value and tapping into the bidder’s motivations to get the deal done.
It can often be worth painting a picture for buyers of what they’ll gain though buying now.
Use the buyers’ emotional connection to the property and remind them that slightly lifting their offer could mean they get their Saturday mornings back, or just how close they are to getting out of that unit and finally securing their kids the backyard they’ve always wanted.
Some examples of effective dialogue at this stage include:
“Your offer is ‘X’ the vendor’s reserve is ‘Y’. You have come 99 per cent of the way, one last push should secure you the asset here today.”
Or
“Don’t lose this incredible property for ‘X’ dollars.”
- Encouraging owners to meet the market (reduce the reserve)
The dialogue between agents and vendors is also crucial in convincing an owner to lower their reserve price in line with what the market is telling them.
Understanding the owner’s motivations is key and by empathetically addressing the owner’s concerns and goals, agents can make a case for adjusting the reserve.
Whether it’s the need for a quick sale or the desire to move forward with retirement plans, agents must effectively communicate the potential advantages of adjusting the reserve price to align with the market.
You might say to a vendor that there’s been an outstanding auction today with multiple bidders turning up and pushing the price up to this level.
You can demonstrate to them that while they might not have achieved their ideal price, this is what the market is telling us and they can now move on with their life if they are prepared to accept that valuation.
Effective dialogue at this stage might be something like:
“Mr/Mrs Vendors this has been a sensational auction. All parties have participated as expected. I understand we are under your reserve price, but my question is, ‘Will you accept the current offer to move on with your life and commence retirement (or any other reason for sale)?’”
Saying this allows you to reiterate to the vendor that their original intention for selling is now achievable.
Auction floor dialogue is an incredibly powerful tool to get the best possible result for your clients, but unless you’ve been communicating effectively in the weeks leading up to the auction, it might fall on deaf ears.
However, you don’t have to reinvent the wheel every week. Once you come up with good quality dialogue that works for you, it will continue to be effective for a very long time.
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