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.

Manawatu Standard - Property Weekly - - Front Page -

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.

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