Putting houses under the hammer
Harcourts auction rooms are a far cry from the sale yards where Mike Pearson started his career, Sue Emeny writes.
There’s far more to being an auctioneer than just calling the auction, according to Harcourts auctioneer and salesperson Mike Pearson. A lot of work goes on before the auctioneer takes the podium. Calling the auction is just part of the job.
‘‘I’m involved in the whole sale process from start to hammer fall.’’
Mike works with a speech and drama coach to refine his skills. He says this has made a huge difference to his auctioneering.
He learned auctioneering when he started working as a stock clerk attending stock sales. He progressed to auctioning stock, working up to selling at national stud sales.
‘‘I have to say auctioning stock and properties are two different kettles of fish.
‘‘It has taken a lot of time and dedication to get to where I am at the moment.’’
Mike, who has 34 years’ experience as an auctioneer, says when an owner puts their property up for auction they have three chances of selling it.
‘‘It can be sold prior to the auction, on auction day or post auction.’’
Most properties tend to sell prior to or on auction day, depending on the market.
If a property fails to sell on auction day, the intense marketing that has been carried out will generally ensure it sells within two weeks post auction.
There’s been a big rise in the popularity of auctions, particularly in Auckland, where at the end of last year the number of residential properties sold at auction hit an all-time high. According to the latest Real Estate Institute of New Zealand data, more than a quarter of that region’s properties sold under the auctioneer’s hammer during November. The family home has been the most popular to sell via this method.
Mike says the popularity of auctions has grown with the advent of a new code of practice.
‘‘The auction process is more open and transparent, all bids have to be declared.’’
He also sees auctions as the only means of sale where an owner can dictate the terms and conditions of sale.
Harcourts has had a strong auction focus for more than 20 years, Mike says.
‘‘I feel strongly that we have a very indepth knowledge of the auction business and we know it intimately. When we recommend a property goes to auction, there’s a reason for that. We have the tools and the skills in place to back up that recommendation.’’
Harcourts generally conducts 500 auctions a year in the central region of which Manawatu is a part, and includes the Kapiti Coast and Wellington.
‘‘In fact, Harcourts has a very strong auction culture throughout the country,’’ Harcourts director/manager Stuart Pescini says.
Stuart says generally the reason an auction is recommended is because the owner wants a result within a certain period of time. ‘‘The main reason for auctioning a property is that a result can be achieved within a defined time frame, as opposed to putting a property on the market and just hoping.’’
When putting a property up for auction, a week’s lead-in is followed by an intense four-week marketing campaign.
Figures show it’s a successful means of selling a home.
‘‘During November and December, 90 percent of homes put to auction [by Harcourts] sold under the hammer,’’ says Stuart.
The interest stimulated by the marketing campaign gives the owner the opportunity to deal with cash buyers first at auction.
Mike says the activity level is much higher when a house is marketed for auction.
‘‘A lot of people say they don’t like auctions, but they still have a look at them,’’ says Mike.
Sale by auction can be a nerve-racking process for buyers and sellers alike. For the seller, it’s the fear of realising their expectation.
Stuart says at odd times buyers will turn up out of the blue, as some like to keep their interest to themselves.
‘‘We get the odd surprise, people who have turned up because they liked the look of a property, purely by they way it has been presented at auction, and have bought it, even though they haven’t been through it.’’
Before an auction Mike and Harcourts salespeople will work with their buyers and sellers. Mike will talk to buyers about the terminologies used and ‘‘inform them on what will happen’’.
‘‘We have to make sure everyone knows what’s going to happen and how the bidding will unfold, so they will know when to put their hand up and to stop when their top line has been reached.
‘‘We tell buyers they need to have a figure in their mind. We ask them if they would be disappointed if the property sold $1000 above that figure, for the sake of another bid. That’s a decision they have to make on the auction floor.’’
Mike says a lot of people have never attended an auction, so it’s important to make sure they are relaxed.
‘‘It’s fortunate that we can sit down and talk with people before an auction and reiterate that we are looking after their interests.’’
At the start of the auction Mike will run through how it will be conducted. This will be followed by a power point display describing the property.
‘‘We then reach the most exciting and defining moment when I tell buyers they have the opportunity to buy the property.’’
Stuart says at the end of the day the price that is achieved is at a level that suits both parties.
‘‘Some properties sell at a surprising level and some are a little disappointing. However, that’s primarily due to market factors.’’
Going, going . . . Harcourts auctioneer Mike Pearson conducts a sale.