From Tough Listings to SOLD! Auction Strategies for Estate Agents

Selling homes through private treaty can be a real challenge particularly if the property needs work, is unusual in one way or another, in a remote location or the market is simply going through a slow patch.

In such scenarios, estate agents and property sourcers are increasingly using auctions to turn difficult listings into successful (and quick) sales. Let's delve a little deeper: 

Why Auctions Work for Tough Listings

Auctions can provide a competitive advantage relative to traditional open market methods. These include...

• Speed and Urgency: Auctions set a definitive date for sale, creating urgency. This reduces the likelihood of lengthy negotiations and slow decision-making, which can kill buyer interest.
• Competitive Bidding: An auction’s atmosphere often leads to a competitive mindset. Buyers get caught up in the excitement, driving prices up as they compete to win the property.
• Transparency: Auctions are clear and open – everyone knows the starting price, and buyers can see bids as they come in. This eliminates the uncertainty that can deter buyers in a traditional sale.
• Suits Unique and "Problem" Properties: Auctions can attract buyers looking for something different. Unique homes or properties with unusual features are often better appreciated in an auction setting, where they stand out instead of getting lost in the sea of listings
• Great for Properties with Legal Issues: auction buyers, whilst often seeking discounts to accommodate the associate risk, are more likely to be unphased by complications such as encumbrances, restrictive covenants, negative easements and unfulfilled overage clauses. 

Pre-Auction Strategies to Set Up for Success

Success in auctions starts with the groundwork. Before the auction day or online promotional period, it’s essential to prepare the property and build anticipation among potential buyers.

1. Accurate Valuation

Setting the right starting asking and guide prices is crucial. A too-high starting bid, for example, can scare off buyers, while an extremely low one might not attract serious interest (and may even lead to unwarranted suspicion). We always suggest aiming for a competitive, fair price that will draw in a wide range of potential buyers.

2. Property Preparation

Proper presentation is key. Whilst most auction buyers will not expect all the "bells and whistles", its crucial that the auction highlights the property's unique features, potential to add value in the photos and video tours. Remember to add a

3. Marketing the Auction

Marketing is crucial for generating buzz and ensuring high attendance on auction day. The auctioneer you select should use a mix of digital and traditional marketing, including:

• Listings on Major Portals: Ensuring visibility on key platforms like Rightmove, Zoopla, Prime Location, and OnTheMarket
• Exposure on Niche Platforms: Featuring properties on lesser-known portals such as Gumtree's property section, PropertyHeads, Placebuzz, OneDome, Homesearch, and Mouseprice
• Established Brand Reputation: Leveraging the credibility and trust of a well-regarded brand
• Access to Investor Networks: Utilising an investor database (such as a "black book" like the one developed at Property Solvers through targeted investor profiling)
• Professional Visual Marketing: Showcasing properties with high-quality photography, immersive walkthrough videos, and advanced tools like Matterport for augmented reality experiences
• Comprehensive Property Details: Crafting detailed descriptions that emphasise standout features and include valuable insights about the local market
• Auction Portal Visibility: Listing properties on a dedicated, SEO-optimised auction portal to attract targeted traffic
• Strong Social Media Strategy: Promoting auction properties through active campaigns on platforms such as LinkedIn, X (formerly Twitter), Facebook, Instagram, and TikTok to engage the right audience
• Targeted Advertising Campaigns: Extending property visibility through carefully tailored ads aimed at reaching broader, relevant demographics
• Traditional Marketing Methods: Enhancing offline engagement through prominent boards, printed brochures, and professionally designed PDFs
• Supportive Sales Team: Providing a knowledgeable team available to discuss property details, instilling confidence in potential buyers.

4. Choosing the Right Auction Type

Not all auctions are the same. Decide whether to go for a traditional, fully online auction or a hybrid / live stream approach.

You (and your client) will also need to decide whether to go for the traditional 28-day sale (usually attracts cash or bridging-financed buyers) or the longer 56-day delayed exchange approach (which can achieve better sales prices but somewhat less secure).

Crafting a Winning Auction Strategy

Once the pre-auction work is done, it’s time to develop a clear strategy for auction day:

1. Setting a Reserve Price

The reserve price— the minimum the seller is willing to accept—should be carefully considered. Setting it too high can deter potential buyers, while a low reserve might not cover the seller’s bottom line. Aim for a realistic number based on market analysis.

2. Open House Events

Pre-auction open houses are essential. They offer potential buyers a chance to experience the property firsthand and build excitement. Hosting multiple open houses can help attract a larger pool of interested bidders.

3. Bidder Qualification

Make sure that only serious buyers participate. Pre-qualify bidders by requiring a deposit or proof of funds. This ensures that only committed buyers will be in the room (or online) when the bidding starts.

4. Timing the Auction

Choose an auction date and time that will maximise attendance. Consider weekends or evenings to accommodate buyers’ schedules, and avoid holidays or dates that might clash with other major events.

Maximizing Results on Auction Day

The big day (or oneline "auction period") has arrived, and it’s crucial to handle the auction expertly to achieve the best outcome.

1. The Auctioneer’s Role

A skilled auctioneer can make or break the auction. They should be engaging, enthusiastic, and capable of building momentum among bidders. The auctioneer’s energy often sets the tone, so pick someone experienced and charismatic.

2. Building Momentum

Encourage early bids to get the competition going. Highlight the property’s unique selling points and push for excitement among bidders. If bidding stalls, consider suggesting a small increment to keep the momentum alive.

3. Handling Low Bids

If the bidding starts low, don’t panic. It’s common for bidders to wait until the last minute to show their real interest. The auctioneer can help by guiding increments and reassuring the audience that there’s still value to be had.

Post-Auction Follow-Up: Ensuring a Successful Sale

What happens after the auction can be just as crucial as the event itself. Make sure to have a clear post-auction plan.

1. If the Property Sells

Once the gavel drops, whilst auctioneers have an obligation to finalise paperwork, a lot of the hard work is done. Nonetheless, maintaining momentum after the auction helps prevent buyer’s remorse. Make sure that contracts are ready, and all terms are clearly outlined.

2. If the Property Doesn’t Sell

Not all auctions end in “signed, sealed & delivered” but that doesn’t mean the effort is wasted. Perhaps you can consider the following:

• Offering the property to the highest bidder, even if the reserve wasn’t met.
• Negotiating a private sale with interested parties who attended.
• Analyzing feedback to refine the strategy for a potential second auction.

3. Collecting Feedback

Feedback is invaluable, both from bidders and sellers. Use it to improve future auction strategies and understand what worked well and what didn’t.

Final Remarks

With the right preparation, a well-crafted strategy, and an experienced auctioneer, even the toughest listings can go from stagnant to SOLD.

Auctions will essentially offer an effective way to offload those hard-to-sell properties. With industry-leading commission structures, full sales process control and low fall through rates, Property Solvers Auctions are actively searching for estate agents and property sourcers to work with.

Please email us at auctions@propertysolvers.co.uk and one of the team will be in touch to discuss further.