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Buyer Management


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Danny Grant, Running Brilliant Auctions

There are benefits to selling by auction, but sometimes owners hesitate when faced with the choice between this method and private treaty. Auction extraordinaire and Real Estate Academy trainer Danny Grant knows how to sell those benefits. In fact, he has achieved a consistent 100% clearance rate at auction for the past 20 consecutive months.

Mr Grant said the main benefits of going to auction were to attract top price and create excitement. “The auction deadline really can be a powerful tool to get buyers to make a strong offer,” he explained. The first place to start with an unsure vendor was to isolate any fears about the process by asking why they were hesitating. “Most of the time, it's because they've had a failed auction before and then it's important to explain it may not necessarily have been the process. It could have been the market, it could have been the pricing, the presentation or that the agent didn't know how to sell by auction,” he explained.

Knowing what to expect.

Before the meeting he sends an information kit with an agenda and letter explaining to the owners he will need at least 90 minutes to cover everything. The kit includes current market activity, information about the company and the Grant team and the fundamentals of maximising price. Then the discussion revolves around the owner’s position in the market, comparable properties, marketing strategy, examples of what had worked for past clients and finishes with timing and – hopefully - a booking for a series of open homes.

Initial auction discussion role play

Danny Grant: Have you sold before? Lee Woodward: Danny, we have and it was a couple of years ago now.

DG: Okay and how did that go Lee?

LW: It was okay, the agent promised us all these things would happen and was quite big on price and we got all excited, but it didn't seem to go that way.

DG: Okay so you've highlighted there that maybe the price was a bit of a problem up front and might have been a cause for the property not selling on the day of auction?

LW: Yeah, I think so.

DG: Okay, well the most important thing that I'll cover off today is the process of selling because, I guess in a lot of ways Lee, it is the process that will get you sold, not the promise of a price. So what I want to concentrate on is not the price that we think it's going to get, more getting the price guide right. Lee you've sold before and you've obviously had a not so good experience. What are you looking for this time around in an agent?

LW: Danny it all sounds pretty good, but I'm just not sure that auction is the way to go for us.

DG: Lee I understand how you feel, I've had a lot of clients in the same situation as you. Let me give you an example of a property that I sold last year. They didn't want to go to auction. What I explained to them was that, in a lot of ways, if we sell prior it's like a private treaty, in a way, and 30 per cent of my properties are selling prior. So how about we set an auction and get the date on it? So we did that. She wanted $1.7 million for the property, so we set the auction. First open house I got a 1.7 offer, she said sell. I said hang on a minute I've got a few buyers. And four days later we actually sold it for $1.935 million. Now Lee had I set that for sale there is no way we would have had it for sale for 1.9 or 2 million to get that level. It would have been for sale at 1.75 or something like that so it would have cost them a lot of money not going through auction…

“People want something they can rely on, and I go in there with the attitude of this is how I work and if it doesn’t work for you then we won’t work together. I know what’s best for them to get the job done and my days on market is 29. They will be off the books in 30 days because I know that that is what will get them the best price,” Mr Grant explained.

The difference between a successful and failed auction a lot of the time is knowing what is going to happen on the day, Mr Grant said. Agents know whether there will be some interested parties committed to bidding, if the price reflects the market and if it should sell on the day, if not before.

Another key point is knowing how to read what the buyer is saying. “You have got to know when to push and when not to push, when they are keen and when they are not really keen. If they are throwing negatives at me, well I know that they are probably pretty keen and I will say ok, that is what you don’t like about the property but what do you like about the property and get them to repeat what they like back,” he said.

Open lines of communication

But the most important factor in making an auction work is vendor communication. “I don't want a vendor to call me. If I'm communicating properly then they won't need to call me. I set the rules of the relationship up from the start,” Mr Grant explained. Weekly reports are an additional communication tool to keep vendors in the loop, detailing how many buyers have been through, where they have come from, contracts taken, contracts withdrawn, web hits, price feedback and expected bidders.

This constant communication all leads to the actual day of the auction when Mr Grant spends time with the owners explaining how the day will unfold, where they should stand, what the auctioneer will say and the best and worst case scenarios. And if the property doesn’t sell on the day it is still about working hard to sell the property, preferably within the following 2-3 days, “because if you're not doing anything, they're starting to think about another agent”.

 

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Danny Grant