Now we’re talking
It seems Grant Child was destined to use his voice. Never mind his former life as a drill instructor – he’s called more than 9000 auctions during his 20 years as an auctioneer, as many as 54 in one day. He and his wife Cheryl live in an Otumoetai home he called to auction but didn’t sell under the hammer. As he listened to himself describing it, it sounded so good, he was sold!
His hammer-shaped cufflinks catching the light, Grant – who covers most of Eves’ auctions in the Bay of Plenty – sat down to enthusiastically talk some more to UNO, sharing tips, misconceptions, facts, figures and the ABC ‘buyer alphabet’, and mentioning the many charity auctions he calls, his sheer passion for the job... He says he never loses his voice.
There’s undoubtedly plenty to talk about, as auctions are on the rise. They’re the preferred method of property sale in the Bay of Plenty and they’re here to stay. Their clearance rate is incredible, says Grant, and they’re transparent – they give every buyer an equal opportunity to purchase and vendors the chance to pinpoint the buyer who’s prepared to pay the most. As such, they identify a property’s true market value.
Auctions are the method of sale that achieve the highest price in the shortest time frame, and Grant loves them. “It’s a thrill to bring the hammer down and witness people’s excitement,” he says.
Sweaty palms and buyers sitting on their hands for fear of an accidental upward arm jerk, Grant’s seen it all. Whereas some buyers love the thrill of an auction, others feel fear, fuelled by the worry that they’re going to pay too much. Grant’s advice for short-circuiting this is to establish three figures: what you’d like to secure the property for; the price you are happy to go to; and your walk-away, absolute ceiling price, so you don’t get forced into a position you can’t afford.
Talk auctions with Grant and you can’t help but notice the words “absolute nonsense” repeated again and again. That, he says, is because of the misconceptions people have about them. Here are his top five:
<subhead> Misconception 1: An auction is a failure if the property isn’t sold
Auctions are a process, says Grant, a complete marketing programme with different phases of activity spanning 90 days – 30 days leading up to the auction and 60 days post-auction (if the property doesn’t sell under the hammer). Phase one of the process begins when a property is listed. “During phase one, we gather market intelligence from buyers active in the marketplace and take that information back to the vendors so a realistic reserve can be set,” says Grant.
Phase two is the calling of an auction. It gives cashed, unconditional buyers (referred to as A buyers) the first opportunity to buy the property and the seller the chance to work with cashed, unconditional buyers in the first instance.
Phase three kicks into action if an A buyer hasn’t been identified and there’s the need to continue searching for a buyer or to work with people categorised as B or C buyers. B buyers are those who still need to do their due diligence by acquiring specialist reports, while C buyers are those who have an existing house to sell before they can buy another one. Both B and C buyers get the first opportunity to buy after an auction.
Grant says that if a house doesn’t sell at auction, it’s likely due to one of three things: the buyers identified aren’t in cash, unconditional positions; the buyers and sellers aren’t in agreement on the value; or buyers for the property aren’t in the marketplace as real estate agents work through phase one of the campaign.
Misconception 2: Auctioneers use vendor bids to put up the price
“When vendors sign our reserve form, they confirm in writing that they won’t position anyone else to bid and give the authorisation for the auctioneer only to submit bids on their behalf,” says Grant.
Misconception 3: Auctioneers put vendors under pressure to sell
“We present an opportunity,” says Grant. “When buyers say they’re not prepared to pay more, we suggest vendors ask themselves: ‘Does the offer allow you to achieve what you want to achieve to move on to the next stage of your life?’ If the answer is yes, we suggest they sell.”
Misconception 4: Auctions are only for high-price or unique properties
What it comes down to is willing buyer, willing seller, says Grant, whose highest sale price was $7,350,000 for a Coromandel orchard.
Misconception 5: First-home and conditional buyers can’t buy auction properties.
If this sounds like you, Grant says you should still view auction properties. If they don’t sell under the hammer, you can come forward.
EVES.CO.NZ
Fast facts
The Realty Group (Eves, Bayleys) is consistently selling between 60 and 70 percent of its properties under the hammer.
The number of Realty Group auctions is up 10 to 15 percent on last year.
During the month of October, Eves BOP and Waikato held 113 auctions, with 92 properties sold.