Think Like an Auctioneer

One of the most effective strategies many agents have found for selling clients’ homes as quickly as possible -- and for its highest price -- is creating an auction-like mentality at the beginning of the marketing process. Count me as one of them!

Realtors who can generate a sense of urgency, competition, and scarcity spark buyer interest and excitement. If it is possible, this strategy helps to drive up the perceived value of the property for your client the seller and can lead to multiple offers in some markets, often above the asking price.

Photo courtesy of Getty Images

An auction mentality taps into a buyer’s fear of missing out, encouraging potential buyers to act quickly before they lose the opportunity.

The first step for agents in establishing this sense of urgency is to set an attractive price. If I think a home will have a great deal of interest, I urge my sellers to price it at or a hair under its indicated value. Not a low-ball price, but one that is just shy.

If a home is worth more, then buyers will recognize that and create a bidding war. As we all know, an overpriced home – even slightly – often ends up with a selling price below where it should have been.

You can then create anticipation before the listing officially hits the market. Depending on your Board of Realtors’ rules, you can tease the listing by offering sneak peeks or holding exclusive pre-listing events for select buyers or agents.

Your social media platforms and email marketing can help build interest, allowing you to create excitement and prime buyers to take immediate action when the listing finally goes live. By the time the house is available for showings, prospective buyers will feel compelled to act fast because they know other interested parties are already aware of the property.

You can focus on positioning the home as a rare find or an unbeatable opportunity. Your listing descriptions, professional photos, and virtual tours should all convey the idea that this is a home that will attract a lot of attention.

By subtly implying that there is high demand for the property, you create a sense of competition among potential buyers. This can translate to stronger offers, especially when buyers feel they may lose out if they don’t move quickly or have too many offer conditions.

To further enhance the auction-like environment, I will often start showings on a Friday or Saturday but state that any offers received will not be reviewed by the seller until Monday.

This avoids the problem of an offer demanding a response before other people being able to see it. I have this written in most of my listing contracts as well so that sellers aren’t tempted to take such a demanding offer. It also sends a message to buyers that they should make their best offer, perhaps with an escalation clause, at the outset, rather than expect to go back and forth in negotiations.

A word of caution, however… It is a rather cocky thing, in any market, to expect an offer, much less a flood of them, the first weekend.

The COVID years of bidding wars - at least in my area — were unlike any other in my forty years. My use of Excel sheets to weigh 23 offers was remarkable and unlikely to be seen again. So, my wording to all agents is “Any offers received will be reviewed on Monday.” I would never say, “All offers are due on Monday.”

I wouldn’t like egg on my face were there no offers!

Finally, you should maintain friendly communication with all interested parties, ensuring they understand the competitive nature of the market. Transparency about the number of offers, interest levels, or upcoming showings can heighten the sense of urgency. Make sure, however, not to give one agent more revealing information than you give to others. The one who receives such a favor may rightfully wonder if another agent is getting even more.

Just give each agent the same information.

If a bidding war has occurred, personally call the “losing” agent. It has become more common for listing agents to simply email terse messages saying “Thank you but we accepted another offer.” These buyer’s agents spent time showing the house and preparing an offer. You can spend two minutes on the phone.