With the Victorian real estate industry now able to host in-person auctions, we thought it was the perfect time for a refresher course, courtesy of superstar auctioneer Damien Cooley, who shared his knowledge last July on the Elevate podcast.
Damien Cooley is amazed at how many auctioneers actually don’t use a hammer.
He notes it’s one of his most important tools on auction day, because Damien uses it as a way to entice uncertain buyers to bid.
For example, if he can see someone’s considering placing a bid, he’ll speed up the auction.
He might increase the volume and change the tone of his voice, booming “first, second, third”.
The buyers know that once he says “third”, there’s a chance that hammer will fall, even if he’s not within the reserve price.
He’ll walk over and grab the hammer from his assistant.
“It signals ‘he’s going to sell it,’ but I might be $100,000 away from the reserve,” Damien explains. He can’t sell it under the reserve, of course, but that’s a tool that he uses to try and extract a bid out of somebody.
“It’s the ability to be able to read a buyer, read a crowd,” he says.
“Knowing when I can connect and convince someone to bid $50,000 instead of $5000 – and being able to press that button when I need to. But it’s also being able to pull back and give somebody time when you need to. That’s intuition – it comes with experience.”
Another tip is to let the bidders set the pace of the auction.
Damien will try and guide bidders by suggesting increments that he feels are appropriate, but if they won’t do that, and he’s got multiple registrations, he lets the buyers take control.
“If you’ve got loads of bidders, allow them to bid. One thing that you can fall in the trap of is hindering bids. If you’ve got lots of buyers, let them bid.”
Then, as the auction heads towards conclusion, that’s when Damien starts guiding the buyers towards where he thinks they should be landing.
He’ll try to convince that buyer to bid confidently, when he knows that the other buyer might be starting to really weaken.
He’ll always try and get a big bid at the end, when he knows that the other bidder may actually be out on that last bid. That’s part of his role.
“If you have one registered bidder or one interested party, your strategy differs, because you need to understand what the owner will sell the property for, what you actually think that is achievable and what you think the buyer is going to pay.”
Damien also urges auctioneers to consider the bigger picture.
“Auctions are a show,” he states. “It’s not just about getting a great result for the seller.
“Obviously, that’s your primary focus, but if it’s not going to sell, you also need to put a good show on for the agent,” he explains.
“Always completely respect the fact that part of the auctioneer’s role is that you’re representing the agent, their brand, their business, and when we turn up to do that, you’re employed to represent them in the right way.
“If you have no registrations or you know the property is not going to sell, it’s really important that you either sell it or make it more saleable post auction.
“Not every property sells at auction, but if you can make it more saleable post the auction date, then your role is satisfied.”
So, how do you decide whether or not to take a property to auction?
“Every property is an auction property,” Damien believes.
“When you understand the whole concept of what an auction is all about, it’s about removing price as a barrier, allowing buyers to come along and compete for a property and tell us what they’re prepared to pay – and the owner gets to say ‘yes’ or ‘no’, whether they want to take the price or not.
“All they’re doing is that they’re marketing a property in a fixed time frame, setting a date to strategically work towards that date, to get a result on that day.”
If the property doesn’t sell, it’s about making it more saleable post auction.
“A lot of people say, ‘Oh, the auction clearance rate is 40 per cent. Why would you go to auction?’
“We know that auctioning property reduces days on market. If we reduced days on market, we can carry more stock, we can sell more property, and ultimately the competitive nature of multiple bidders registering for a home gives an owner an opportunity to sell for a premium price.”