How to ensure the hammer falls in your favour

Choosing to sell your property at auction is one of the biggest strategic decisions a homeowner can make. While auctions can ignite competition and drive premium prices under the right conditions, they also require some preparation and understanding of the market. From setting your reserve to picking an auction date, careful navigation is important to ensure the hammer falls in your favour.

Bayleys National Auction Manager Conor Patton says there are some big advantages that come from selling at auction.

“If you start out with a no-price campaign, you get a wide range of buyers with a wide range of budgets, and you get a really good market indicator without the risk of under or overpricing it.”

“What an auction then does is put a deadline on things which stops the possibility of buyers dragging their feet and brings a sense of urgency to the process.”

Patton says an auction also adds a layer of certainty to the sale too.

“It requires buyers to be cash and unconditional, which puts vendors in the best possible position because buyers spend time, effort and money to get there, and things cannot fall through.”

“It’s great for buyers too, because you have vendors who have also expressed a reasonable level of commitment to selling, so you're dealing with serious people on the day.”

There’s also a higher level of transparency on the auction floor.

“There’s no limit to the amount of times buyers can place bids - unlike a multi-offer for a tender where you mostly get just one chance at it, and you go in blind, not knowing how other people value the home.”

“At auction however, there’s a space to take encouragement from seeing other people bid to ascertain a property’s value and decide where you set your limits.”

HOW IS THE STARTING BID DETERMINED?

While auctions often stem from a no-price campaign, there’s always a starting value where the bids begin, and that starts with the bidders themselves.

“We always give buyers the opportunity to assign a value. First and foremost, they always get the chance to open the bidding, and if they don’t, the auctioneer will generally suggest a start figure.”

“If we have multiple bidders, we want the starting bid to be at a level where we know it’s going to generate some competition and momentum to allow everybody the chance to be part of it.”

Patton says he saw that play out at a recent auction for a property that had nine registered bidders.

“The opening bid was $1.3 million, and it sold for just over $2 million, which is a long way from start to finish. But when you have bidders, that’s fine.”

“If we're in a situation where we've got just two bidders, or one bidder, then we wouldn't have started that auction at that level, because there's not going to be the competition to carry it up.”

HOW IS AUCTION ACTIVITY TRACKING?

It’s no secret the market has been challenging, but Patton says since August, things have started to reawaken in our biggest city.

“Our success rate under the hammer has increased in Auckland to the point where it's actually ahead of a number of other regions, which was not the case 12 months ago.”

“We've seen more multi-bidder auctions, and an uptick in pre-auction offers - not that it's led to higher prices, but things are certainly flowing through far more easily.”

The higher the price point, the more bidders there tend to be, but Patton says that doesn’t mean first home buyers aren’t serious contenders at auctions too.

Nationwide auction activity was up 32% this September on last September, and October is up 21% on the same time last year.

“We also expect to see relatively strong activity in the traditional period between now and up into mid-December.”

DOES THE TIME OF YEAR MATTER?

Patton says auction activity levels are quite seasonal.

“Our biggest auction months of the year are November and March, and then that would also flow through to the likes of October, December and February. In those busier selling seasons, we do see a higher volume.”

“That doesn’t necessarily translate to a higher clearance rate though, because there’s far more competition.”

He says a lot of successful results have actually come through in early spring or late winter because there are less options available.

WHAT ARE SOME OF THE COMMON MISTAKES?

Ultimately, Patton believes when you start a campaign, you need to fully commit to it in order to get the best results.

“If you're going to be doing a short and intensive campaign, you need to have a decent budget and marketing campaign behind it. Because if you just limp along with only a base listing on Trade Me and no digital or print presence, then you're definitely doing yourself a disservice.”

“If you commit to it, you commit to it 100% and you also see it through.”

Because pulling out at the last minute can mean an opportunity is lost.

“I've had situations where owners do that, and then the following week, someone turns up for the auction, and it's not happening because the owners didn't know that person was going to be interested.”

WHEN IS IT NOT RIGHT TO AUCTION?

Patton says going to auction is suitable for almost any property.

“Even if properties have issues, they can be fully disclosed, and people can prescribe a value. We deal with properties which have consenting issues or no warranties at all, and they can still be put into auction.”

But you might run into issues where there’s a handshake agreement or things aren’t fully disclosed.

“That could mean buyers are a little bit uncertain and want time to do some homework, but it's quite rare.”

Another situation is also when two adjacent properties from the same owner are being sold.

“There would be some uncertainty around if someone wants to buy one or buy both properties so we would look to find another way to sell.”

Patton says it's easy to understand why people might feel more comfortable going to auction in a more heated market because they're expecting to get more bidders.

On the flipside though, Patton says taking the leap during a downturn can offer you certainty of sale, even if it’s not at the price you were hoping for.

“It can be very good, not because we're expecting to get a handful of buyers, but because the owners want to get a cash, unconditional, certain sale.”

“There's a value in being a cash, unconditional bidder and giving an owner that certainty. At that moment, it’s worth over and above the price they're being offered.”

Ultimately, deciding whether to sell at auction comes down to knowing your property, your buyers, and your appetite for a little theatre on sale day. When done well, auctions can create urgency, emotion, and exceptional outcomes, but success relies on strategy, timing, and expert guidance.

With the right agent and a well-executed campaign, that moment when the hammer falls can be one of the most rewarding in your property journey.