For as long as auctions have existed, the discussion over whether or not on-site or in-room auctions are better has taken place.
There are benefits and potential pitfalls for each process.
Firstly, it must be noted that both on-site and in-room auctions promote the auction method and create a competitive environment to achieve a premium price.
There is not one method that works better than another, but agencies use the different methods in different ways to help them achieve their company goals and aspirations.
The benefits of an on-site auction:
- Convenience: On-site auctions are held at the property being sold, which is often convenient for both the seller and potential buyers, as they do not need to travel to a separate location.
- Personalisation: On-site auctions allow for a more personalised experience, as buyers are able to see the property first-hand and get a better sense of its unique features and potential.
- Transparency: Bidders can see each other and the auctioneer, making it easier for buyers to know exactly who their competitors are.
- Emotional connection: Seeing the property in person can help potential buyers develop an emotional connection to the property, which can drive them to bid more aggressively.
- Agent promotion: Arguably one of the best ways to show a prospective client how good you are is to invite them to see how professionally you operate. This often prompts vendors to sell which, in turn, builds business.
The pitfalls of on-site auction:
- Parking and accessibility: Depending on location, parking and accessibility can pose a challenge, particularly with larger crowds. The available space within a property may also be constrained, especially in the event of bad weather.
- Weather: If the weather is poor on the day of the auction, it can negatively impact attendance and affect bidding.
- Property shortcomings: Buyers’ concerns about the property can be glaringly obvious at on-site auctions, which can cause buyers to hesitate at the pointy end of the transaction.
- External influences: You have no control over passing traffic, disgruntled neighbours, leaf blowers etc, and this can cause distraction and hesitation among buyers.
The benefits of in-room auction:
- Larger audience: In-room auctions can attract a larger audience as they are typically held in a central location, with multiple properties to go under the hammer.
- Accessible: In-room auctions can be more accessible for people who cannot attend on-site auctions, as they can be watched remotely or purchased through online bidding.
- Control the elements: There are no distractions at an in-room venue. The external weather, disgruntled/noisy neighbours and traffic are not the final thought in a buyer’s mind.
- Efficiency: Agents are able to use teamwork to their advantage to secure more sales in a reduced period of time. This drives profitability and ensures more transactions for the business, in turn building the database. This does not mean agents are doing a lower quality job, rather that they can spend their Saturdays more efficiently, opening properties and meeting buyers.
- Timing: In-room auctions are typically conducted midweek, meaning agents are in no rush to get away to other opens/auctions, further enhancing Saturday workload and providing more time for the auction.
- Order of sale: A well-designed order of sale can create consistent energy throughout the event, and create confidence in hesitant buyers. This often helps in achieving sales that would not have been successful on-site.
The pitfalls of in-room auction:
- Technical difficulties: In-room auctions can face technical difficulties, such as internet connectivity issues or glitches in online bidding platforms. This is incredibly rare, but certainly possible.
- Less personal/emotional: In-room auctions create a less personal environment for purchasers and some believe in-room auctions don’t provide the same emotional connection as on-site auctions.
- Location: The location of the in-room venue is typically in the same suburb as the desired property, however sometimes it can be located elsewhere and this can cause availability issues.
AuctionWORKS conducts about 3000 auctions annually, with about 35 per cent conducted on-site and about 65 per cent in-rooms. This percentage ranges drastically from company to company.
Agencies tailor their approach to auction depending on what their company goals and aspirations are.
Some companies focus on building community engagement and profiling through on-site auctions, while others believe a more formal event provides a better platform for achieving the same outcomes.
It is also possible to run a mix of both on-site and in-room auctions. The vast majority of our clients do this.
The big question is whether or not a particular property will sell better on-site or in-room.
The answer is that with an effective team and strategy, either method will garner the exact same result.
However not all teams are effective and this is what gives vendors sub-par results.
Premium properties in premium locations ,selling well in perfect conditions, provide a euphoric experience for everyone involved.
It is street theatre at its best.
However, the same location with terrible weather, local roadworks and a barking dog can vastly change that experience.
When looking at in-room auctions, the same will apply.
High quality venues presenting multiple properties professionally, accompanied with canapes always creates an amazing, vibrant atmosphere.
In a poor venue, with limited listings and poor presentation, the experience is stale.
Agencies and agents with high stock levels will tend to lean towards in-room auctions (depending on their company).
This enables them to be more efficient with their Saturdays and conduct more transactions.
Overall, the choice between an onsite and in-room auction will depend on the unique characteristics of the property and the preferences of the seller.
A skilled auctioneer will be able to help guide the seller through this decision-making process and ensure a successful auction regardless of the format.
