Is one bidder enough at auction?
A question I am often asked – would I able to conduct an auction with just one bidder?
The reality is that, at times, there may be a shallow pool of buyers for any property. Whether it’s the location, price, or general suitability, the reality is that there are not always multiple buyers for a property on a given day. Sometimes, there is only one buyer willing to part with their hard-earned cash for the home.
When followed accurately, the auction process provides a deadline. If they have interest in the property, can buy at auction and/or complete prior to auction day, it is best practice to elicit the offer early and commence a negotiation whilst still continuing to market the property.
The auction process dictates an action timeline and if there is one unconditional buyer who can purchase under auction conditions, I will pull out every stop to affect the sale.
However, to gauge the effectiveness of the auction process and whether it will benefit or indeed, burden the seller, I need to assess:
- What has the price feedback been?
- How many interested parties have you met with to gauge interest?
- What offers have been made?
- Has there been a valuation completed?
- What are the three most recent and comparable sales?
- Are we reasonably convinced that we have flushed out the best candidate for the property?
There are two potential outcomes when the purse-clutching buyer fronts their potential new Home. Either they have enough ‘folding’ to make the transaction or fall short and we are looking to the market for another hopeful.
If I were to simply front the crowd on auction day with one buyer and have them not feel the weight of competition, I may find myself with a low bid and a hard slog to drag any momentum into the auction and get the buyer to an acceptable level.
This is when I have a direct conversation with the sole purchaser and test the cut of their jib. If the terms of their offer align reasonably with the seller’s expectations, we press forward with some old-fashioned argy-bargy and unsheathe the biro.
If the expectant purchaser falls short of a reasonable exchange point, the negotiation then widens to include conditional hopefuls into the mix.
Capitalising on the energy in any transaction is key. Multiple bidders at an auction will create momentum but when you are faced with just a single registration, strategy, care and consideration are needed to drive the outcome.
If we miss the initial deadline of auction day, phase two kicks in. The crowd and any potential conditional buyers present need to experience the genuine energy and feel motivated to act.
Opportunity to promote and spruik the property is embraced, setting a new swift deadline so registered bidders, hesitant auctions participants and hopeful participants can put their best foot forward.
At the end of the day, my charter is clear – I work tirelessly for the seller to bring them the best offer the market can offer in that window and let them make an informed decision.