Understanding Buyer Psychology for Auction
When it comes to auctions, too many agents focus on the marketing and how many contracts are being issued but neglect to study a crucial element in the auction process – what are the buyers thinking and how are they feeling? For instance, there is a big difference between buyers who are interested in the home and those who see themselves actually living in the home. For every twenty contracts you hand out to prospective buyers, it is safe to assume that there will be about five serious bidders at the auction.
You can generally gauge a prospective buyer’s interest by such things as how many times they have inspected the property, whether or not they have shown the property to family members or friends and whether or not a solicitor has been engaged to conduct searches and arrange building and pest reports.
Get into the habit of calling back your buyers and have a bank of test questions to screen them in order to qualify their interest, without appearing to be bullying them.
Prospective buyers tend to start looking at properties in a logical way, that is, the number of bedrooms and bathrooms and the size of the block etc. When it comes to price however, it becomes an emotional issue and logic tends to be moved into the background. As the agent, you need to be perceived as a neutral party, while at the same time being the controlling conduit in the situation who keeps people calm.
A good agent will know how to take price out of the equation, encouraging the prospective buyers to focus on the home instead. Price is, after all, a journey which needs time to travel. People don’t buy until they are emotionally attached and once they are, they are generally not as hesitant to pay to their top dollar for what they want.
Knowing when to push and when not to is a fine, but crucial art. Too many agents have a tendency to operate using schoolyard bullying tactics! The ‘soft sell’ approach is the way to go when attempting to maximise the price. Don’t make the common mistake of losing a deal over an issue of pride.
Click here to order Lee Woodward’s book “What to say, what to send”