We have recently seen in the media outstanding examples of auctions achieving premium prices for sellers and subsequently boosting profile for agents. Are auctions the domain of the ‘super agent’? Robert Tulp an independent auctioneer & Director from Apollo Auctions NZ, categorically says this is not the case.
To set the scene Robert says there are reasons to do auctions in every market. At the moment we are seeing strong demand for property, with low-interest rates and expats returning means we are seeing multiple bidders at auctions. In other markets, an agent may choose auction to identify that one unconditional buyer.
Robert explains that the agent and agency, who are not doing auctions, need to look at their method of sale ‘menu’, as all methods of sale strategies need to be on the agency’s menu. Without the ‘full menu,’ he says agents are likely to be missing out on opportunities.
You auction, he says, because you work for the seller to obtain a premium price and an unconditional sale for them. For the agent auctioning a property it is a process, so just follow the process and success will follow.
Robert says an agent’s job is to first sell the property (unconditionally) for a premium, then to sell something to the underbidder and gain their next listing. When an agent is seen to be doing an auction well, someone attending may well say, “can you come and look at my place?” Then there is no conversation about which strategy to employ, as they are already sold on ‘auction’.
When an agent follows the process and markets the property well, the results show in this market by seeing multiple bidders at the auction. Robert says at auction you never know what a buyer is prepared to pay until they are in the auction room, then it is the competitive situation of putting buyers against buyers that draws the premium price. He points out that under ‘private treaty’ methods of sale, you may get two or more people on paper but they may still be ‘conditional’ leaving an unknown outcome that’s reliant on the buyer working through the conditions. This process can be very stressful on vendors and their agents as they navigate the highs and lows of working through conditions and the fear of the offer crashing, then having to go back to the marketplace to find another buyer.
Under the auction method of sale, the agent, through great marketing, draws multiple bidders who have done their due diligence and able to bid unconditionally. It is then the auctioneer who takes over the process and becomes the master negotiator putting the buyer against the buyer. They leverage all their experience to draw the last dollar out of the competing bidders and use behind the scenes strategies to keep the auction advancing for the benefit of the seller. Robert states, “we are always pushing to get every last cent for the sellers, even if sometimes this involves pausing the auction to negotiate with the highest bidder. Sometimes we can see a sizeable gap between the price of the winning bidder and that of the underbidder. We never want to see a buyer happier (in relation to the purchase price), than the seller! “
Robert also says, “A lot of agents may be reading this thinking I don’t need to auction at the moment as there is a high enough demand and I can sell a home quickly then move on to the next. Remember the ‘secret agent’, the one who lists and sells properties in a few days not really knowing if they have achieved top dollar for their seller and gains very little or no profile from it.
If an agent’s not comfortable with the auction process Robert advice is, “rather than putting your head in the sand, talk to the team at Apollo Auctions as they work with a number of brands across the NZ market place and they can talk them through the auction process and reassure them.”
Contact Robert Tulp @ Apollo Auctions NZ robert@apolloauctions.co.nz
