NO MATTER WHAT YOUR market you can be successful with auctions if you are happy to work hard and build trust.
There are numerous comments that tend to indicate negativity, such as ‘it’s all over’, ‘it’s stuffed’, ‘never be any good again’ and, in the world of property marketing, ‘auctions don’t work’.
How often have I heard both agent and potential vendor make that comment? Yet, given that the auction system is over 3,000 years old, I find that incredible. Even the word auction comes from the Latin auctio, meaning to increase.
So where then does the problem lie? With the system or the operator? In my view, very much the latter. Far too many agents and agencies fail to fully appreciate or understand just what the auction system is all about.
In many ways, the term ‘system’ is somewhat erroneous, for the marketing of property is really a process. Provided you follow that process religiously, no matter the value of the property, success and commission dollars will come your way.
Firstly, though, it is critical that you both recognise and appreciate that the axle the auction wheel turns on is one simple word. That word is ‘trust’, and if you have your vendor/s trust you will do deals that many would never have thought possible. So how do you earn this trust? By using what I call in our courses ‘the atoms of the auction’. These are simply the actions of honesty, providing accurate market feedback and giving 110 per cent service to your client.
Do these properly and success will come; but, just as with a track on a bulldozer that goes round and round on the same wheels, should something go missing the vehicle lurches to a stop. Repairing trust, like repairing a bulldozer, is an expensive exercise.
What I find most frustrating is that the actual process is dead simple; in fact, a newcomer to the industry can perform it quick-smart in a ‘left foot, right foot’ approach. While the finer points would need improving – and experience will see to that – there is nothing tricky in it.
Here I am reminded of the old adage that the only time success comes before work is in the dictionary. I certainly don’t shy away from the fact that running auctions successfully can be hard work; but having said that your time management problems will be in the main overcome and you will be building a rock solid foundation for your business and career.
In what some readers may – in fact most probably will – read as a cynical comment, the reasons why a whole raft of agents don’t like auctions are that (1) they are hard work and (2) you become accountable, as there will be an auction day, or night, where the vendor/s will say either yes or no. With private treaty selling, if you are smart enough, you can at sales meetings spin the story out for a considerable time before the day of reckoning arrives!
So what then is the process and what does it look like?
Firstly, from the moment you sign that agency agreement, as you are ‘a marketer not a valuer’, forget what you wrote down as your estimation of value. If not, sure as anything, you will fall into the trap of trying to validate to the market your idea of price, and not vice versa. The result is that what should be honest and accurate feedback is tainted; and come auction day or night, your task in getting a realistic reserve has been made all that much harder.
Secondly, instigate a strong open house program of at least twice a week for 30 to 45 minutes each. This applies whether you are in a metropolitan area or not. Report honestly and regularly to your vendor/s, both verbally and in writing. Work out their interests in life from personal goods such as their photos, books and so on that are in the property and give them a call sometimes based on these interests.
Thirdly, follow up on your OFI attendance register. I know that can be a daunting task in the city and suburbs, but I did say earlier on that auctions sort out your time management!
Fourthly, spend time on your advertisement copy and don’t leave it to the last minute. Ours must be the only industry where hundreds of thousands of dollars are spent creating advertisements with no experience or qualifications on the part of the composer – a reason why so many ads read the same.
Most ads are written with an unconscious aim of pleasing the vendor. In fact, there is only one question you must be able to answer and that is simply ‘What’s in it for the buyer?’ Why would someone want to buy this property? Answer that creatively and you have your headline for a start!