by Carly Susic, Melbourne Property Advocate
When you’re selling your home, one person can make or break the success of the auction: the auctioneer. He or she sets the tone of the auction, guides the bidding process and helps secure you the best possible sale conditions, and ultimately, price. In this blog, I’ll answer all your questions about the role of the auctioneer including:
- what does the auctioneer do
- can I choose my own auctioneer
- what makes a good auctioneer
What does an auctioneer do? The preamble
If you’ve ever attended an auction, you’ll be familiar with the preamble stage. This is when the auctioneer highlights the appeal of the home, the community, the amenities and the area in order to appeal to bidders. The preamble can be quite a performance, and it sets the stage for the auction to begin. It’s important that the auctioneer keep the preamble to the right duration. Short preambles rush the auction whereas longer preambles leave everyone yawning.
What does an auctioneer do? Manage the bidding process
The auctioneer will start off the bidding, and manage that awkward early moment when buyers are reluctant to bid. As the auction gets underway, the auctioneer will know when to accept bids and in what increments. For example bids might start with $20,000 increments at the early stages and as the bidding slows down, increments will reduce to $1,000. A confident auctioneer will know how to manage the increments, when to accept a lower increment and manage the pace of the auction bidding to secure the maximum price for the vendor. The auctioneer will read the body language of the buyers to determine how confident they are in their bidding and whether they’re nearing their financial limit.
What does the auctioneer do? Declare the house on the market
If you have attended an auction, you’ve no doubt noticed that at some point the auctioneer will stop the auction and get instructions from the vendor as to whether the reserve has been met. If bidding is fierce, the auctioneer may allow it to continue without interruption, whereas if bidding is stalling the auctioneer will move to vendor instructions. This is when the auctioneer pauses the auction and informs bidders that they will be speaking with the vendor to determine whether the house has met the reserve and is now on the market.
What does the auctioneer do? Passes in or sells
Lastly, when the auction has reached the final stages, the property will either be sold to the highest bidder, or passed in. It’s always a fun moment of drama when the property is about to be sold, and a good auctioneer will create tension and intrigue before declaring the property sold.
When the bidding does not meet the reserve, the auctioneer will pass in the property to the highest bidder. They then have the right to negotiate privately after the auction.
What are the qualities of a good auctioneer?
The best auctioneers have a sense of theatre and entertainment without being arrogant or smug. You don’t want people rolling their eyes or looking bored while the auctioneer is speaking. A confident performer will read the reactions of buyers and change his or her approach to suit the crowd. They will exude confidence and have the bidders feeling like they are in safe hands, which creates a good atmosphere for bidding.
A good auctioneer can handle hecklers and objections
Many buyers (and even advocates) interrupt the auction in order to disarm the auctioneer. It’s not a great strategy, but a confident auctioneer will handle any hecklers in their stride, and not allow anyone to derail the momentum of the auction. My favourite auctioneers are those who can bat away hecklers with confidence and ease, getting a laugh from the crowd at the same time.
For example as the bidding nears the reserve, some bidders may ask ‘Is it on the market yet?’ or ‘Are you selling?’ They can even be quite aggressive in their manner when asking these questions. A confident operator will handle these situations with grace and keep the auction moving at a pace under their control.
Some auctioneers will attend the open houses
It doesn’t always happen, but if the auctioneer attends the open houses, then they will get to know the interested buyers and be ready on auction day. Otherwise, they will ensure they spend time with the agents ahead of the auction so they have a really firm idea of who the interested parties are before the auction begins.
Can I choose my own auctioneer?
Yes you can, but it may not be offered to you by your real estate agent. Ideally, before you appoint the agent you will discuss options for auctioneers and determine their process. If you don’t ask, you may be allocated the agent’s preferred auctioneer. They may be suitable, but ideally you will be able to have a say in who auctions your property.
How to choose a good auctioneer
Ideally, you should attend a few auctions to see the auctioneer in action. Your agent may talk up their preferred provider, but it’s only when you see them in real life that you’ll know:
- if they can handle the flow of the auction
- how they entertain the crowd
- how they deal with awkward silences (especially at the beginning)
- the quality of their preamble
- how they deal with hecklers
- if they seem confident and assured
- can read the crowd well
- can adjust the bidding increments at the right time
How does the auctioneer get paid?
Traditionally the auctioneer fee is part of the normal agency commission. In more recent years we have started seeing some agents charging auctioneer fees separately on marketing schedules . This is a flat fee, typically anywhere between $400-$2,000.
To summarise: what does the auctioneer do?
- manage the sale process of the house, pass it in or sell to the highest bidder
- present confidently, speak well, entertain the crowd and remain unperturbed by hecklers
- be familiar with the buyers and aware of their likely financial limits
- manage the bidding process including bidding increments by accepting bids at large increments at the onset, then strategically decreasing the amounts at the right times
- direct the flow of the auction so it seamlessly moves to the reserve and ideally beyond the reserve
You may also like
- When you’re the only bidder at an auction
- Your guide to off market properties
- Accepting an offer before the auction
