Transitional market affecting buyer behaviour
Jesse said: “In any transitional market, there is going to be a disparity between what price an owner wants, and what a buyer is willing to pay. It's important for newer agents to work through qualifying the buying processes more than in the past.
“We have come off at the peak of the market, and buyers are wanting a reduction in their sale price at auction. Then you have owners with their heads in the past when their next-door neighbour’s home sold for a premium price. It is now very difficult for agents to bridge those gaps.”
Clarence added: “The auction market has changed and we don’t have as many buyer registrations as before. Buyer behaviour is also different and they are more reluctant, price sensitive, and tentative.
“They're not confident bidders compared to six or eight months ago when we were getting very hot auctions. For a sensitive market you have to be very conservative about your price estimate and how you advertise it.”
What is the best way to handle a one bidder auction?
Clarence said: “You have to use more negotiation skills. A good way to conduct a one bidder auction is to take the bidder aside, and explain they’re the only registration and there's no point trying a low bid because the owner's got a price tolerance, but how we will try to help bridge the gap.
“That transparency translates into a willingness from the buyer to work with you and gives us the best opportunity for that buyer to engage, place a bid, and potentially buy it. It is important to make them feel comfortable.”
Jesse said: “I find that the more obstacles and hurdles we put in front of buyers the more difficult it is. Instead it is best to be open with everybody and most of the time they'll trust you, and you can build a quick rapport.
“It’s important to pre-frame the situation with the vendor and explain the options around price tolerance and strategy.
“A vendor can handle just about anything that happens on auction day, provided you've prepared them for it. The ones where it goes wrong is when they get there and it’s not what they expected.”
Read the situation
Jesse said: “Part of an auctioneer’s skill set is being able to break people down and read people in certain circumstances, and agents are exactly the same. You will have success if you have the ability to read people's stresses or excitement and play on that to your advantage. If a buyer is a confident buyer you should use that buyer to start the bidding.”
Clarence added: “All day, every Saturday, auctioneers read the buyer's stress signs. The minute a bidder starts to talk to their partner, you know that they've probably reached their agreed budget.
“If you ever see tension in the body release completely for a buyer, they're done, unless they're a really good actor. If they've been bidding competitively and they get stress they will start to shorten their increments.
Watch the webinar in full to find out what advice to give during pre-auction discussions and to watch a role play with a solo bidder with two different scenarios.