How to Use Auction to Win More Listings
It’s no surprise that the leading performers in nearly every marketplace across Australia are Auction Listing Agents.
The best Agents in the industry use Auction as a way to achieve a premium price for their Vendor, but also to build their business and generate more listings. How do they do it?
To effectively use Auction to Win more listings, you must first understand the true purpose of an Auction. That is, to expose a property to multiple parties, allow them to compete on a specific date, in an open and transparent environment to achieve fair market value.
The best Real Estate Agents intimately understand the Fundamentals of Auction. By using these principles effectively, they can harness the power of urgency, leverage on the competitive bidding environment, accelerate the sales process and increase their brand exposure.
Harness the power of urgency, by setting a specific date
Firstly, how does Auction create urgency? Urgency in an Auction is simply created by setting an end date to that campaign. By formalising a date and time for Auction and promoting this to your buyers, you send a clear message of your Vendors intention to sell. Further, history has shown that Auction campaigns generate more enquiry than Private Treaty. The main reason for this is that Buyers must contact the Agent to receive a guide price for the property. This increased enquiry will always bring a mix of parties from prospective Buyers, future Vendors or potential Tenants. The best Agents are delicately positioning each of these parties in their database to ensure that with the increased enquiry also comes increased leads and prospects. This is only done by efficiently managing all enquiry.
Leverage on Competitive Bidding Environment
Auctions create a competitive arena for Purchasers to compete in an open and transparent environment. By bringing multiple parties to an Auction, you are often able to achieve a premium result. This very rarely happens in private treaty or EOI campaigns. The reason behind this is that buyers are willing to pay more under the pressure of competition. This is why we see results far exceeding Agent/Vendor expectation. It often has nothing to do with under quoting and more to do with the boiling pot environment that an Auction will create. The real benefit for the Agent isn’t necessarily the premium price achieved, albeit the fact that is incredible for their profile. Rather the benefit is the exposure to a multitude of underbidders who were unsuccessful on the day. Quality Agents are immediately trying to find alternative assets for these buyers and moving their prospects from one property to another. This process creates a snowball effect where one campaign can result in two to three potential sales.
Accelerate the sales process by reducing days on market
One of the major benefits of Auction is that it reduces your days on market. For any business, efficiency in trade should be one of the major factors used to measure its success. Real Estate Agents should aim to sell every property for a premium price, in as short of a timeframe as possible. Never sacrificing integrity and ethics along the way to reduce days market. If an Agent can reduce their days on market, they will have more opportunity to build and manage more business. This naturally increases revenues. Finally, the advantages to an Agent working to a distinct timeline cannot be ignored. This systemised process allows Agents to know where they are at in any given campaign, developing quality habits and processes.
Increasing your brand exposure, showcase a transparent Auction Success
I often say to the Agents I work with, “Don’t tell people how good you are, show them!”. An Agent can letterbox drop every house in a suburb, send out multiple EDM’s and even have face to face meetings. Nothing will compare to the exposure a successful Auction will create. Use the Auction process to invite prospective clients. No longer are you telling people about your experience and professionalism you’re showing them how you perform and how hard you work to extract every single dollar from the buying public. Vendors want to know their Agent is working for them at every stage throughout the campaign. They also want to know that you have the relevant experience to handle the pressure of an Auction and continue to put their best interests first. Successful Auctions achieve what no amount of marketing material can. Use the process to showcase your skillset and encourage prospective Vendors to employ your services.
By using the above principles effectively Agents can harness the power of urgency, leverage on the competitive bidding environment, accelerate the sales process and increase their brand exposure. Embrace Auctions as a dynamic tool in your arsenal and watch your real estate business thrive.
Jesse Davidson | Chief Auctioneer & Director of AuctionWORKS