Even in a challenging real estate market, auctions can be a powerful tool to generate a successful sale.
It all comes down to running your auctions the right way.
As exhilarating as an auction event can be, they require careful planning, strategy, and execution with precision.
In this column, we will explore five actionable items that are crucial to the success of an auction in a challenging market.
Incorporating these key elements into your auction strategy, you can significantly increase your chances of achieving success.
- A ‘good’ reserve set meeting
Reserve set meetings are of utmost importance, if auction success is to be achieved.
This meeting brings together the sellers, listing agent and the auctioneer to collaboratively determine the reserve price.
Having both professionals present, means vendors can draw on their collective expertise and insights to make an informed decision on price.
The auctioneer can provide valuable market insights, auction patterns and auction success stories, while the listing agent can share their knowledge of the property, an insight into the buyers they are working with and the seller’s expectations.
This collaboration allows for a more comprehensive understanding of the market conditions and the property’s value, enabling the team to set a realistic reserve price that will increase the chances of auction success.
It is crucial that the reserve set meeting is not treated as a last-minute task before the auction.
Ideally, it should be a planned meeting scheduled a day prior to the auction, allowing ample time for discussion and analysis.
This allows the team to explore various scenarios and options, thoroughly considering market trends, comparable sales, and buyer engagement levels.
This thorough approach ensures that the reserve price is set strategically and not by chance.
- Creating a plan
A well-thought-out plan is the backbone of any successful auction.
Start by having a clear objective for your auction.
Outline a game plan and allocate resources accordingly.
The number of buyers engaged at the property may mean more assistance is needed from support staff.
By having a solid plan in place, you can navigate potential challenges more effectively.
Hope is not a strategy.
Good agents are prepared for any challenge that might appear.
Great agents use their skill to find the challenges before they become a problem.
- Know your buyer
Understanding your buyer is crucial in tailoring your auction to create success.
Research and rapport are paramount to identify buyer interests, preferences, and purchasing power.
Consider your buyers’ demographics, such as age, occupation, and income level.
This knowledge will enable you to create a strategy that resonate with potential buyers, increasing their engagement and the likelihood of purchasing at auction.
- Create competition
Competition is the driving force behind higher auction success rates.
Great markets are driven by high demand and competition.
Creating an atmosphere of excitement and urgency, means you can generate an environment that leads to increased prices and successful clearance.
Employing strategies such as utilising competitive bidding increments, encouraging buyer participation and buyer pre-auction meetings, can all positively impact competition levels.
Additionally, consider incorporating live streaming or online platforms to reach a wider audience and foster fierce competition among bidders.
- Remember to have fun
While auctions require a serious approach, it’s important to remember that they are also enjoyable events.
Sellers and buyers are generally quite anxious and a stressed real estate team conducting an auction creates more confusion and uncertainty.
Creating a fun and engaging atmosphere can boost bidder enthusiasm and make the experience more enjoyable for everyone involved.
Auctioneers must ensure the entire team foster a culture of collaboration and happiness.
The more enjoyable the experience, the more likely sellers and buyers will participate and contribute to reach the goal.
Achieving auction clearance success requires careful planning, a deep understanding of your buyers and the creation of healthy competition.
By following these five actionable items, you can significantly increase your chances of achieving success at auction.
So, embrace the challenges, get creative, and let the bidding begin!