Earning the Upper Hand in Real Estate Auctions

• By: admin
• On: 03/01/2025 15:34:27
• In: Real Estate

Real estate auctioneers have an uphill battle to fight, as the competition with traditional realtors is, and probably always will be a struggle. According to two long-time Virginia-based auctioneers, the way to ease the burden is to embrace networking, earn referrals, and be passionate about helping people. 

Josh Puffenbarger, CAI, AMM, founder of Allied Auctioneers & Associates, and Tony Wilson, CES, AARE, ATS, owner of Wilson Auction Company, Inc., have known each other for years. In fact, Wilson mentored Puffenbarger, so it is no surprise that they have similar thoughts regarding identifying properties and sellers that are well-suited for auction. They also think similarly in how they approach discussing selling real estate with potential sellers, as well as how to close the deal.

“I feel so passionate about this one thing,” Wilson said. “When you go into a deal, you have to be there for the right reason.” And to put it simply, the “right reason” is to serve the client. Wilson admits that when he was first unleashed as a real estate auctioneer, he had money on his mind. That changed with his first client, an older woman who was selling her estate and knew Wilson's father and grandfather, and even recalled a much younger Tony filling her tank with gas at his family's service station. He didn't have to sell himself or his services to her to get her to sign the right-to-sell agreement, as she said, “Where do I sign?” at that first meeting.

“It was her highest and best asset,” Wilson said of her property. “This money meant everything to her. I left the office and said, ‘We have to perform.' I realized immediately it had nothing to do with the money – it was about helping her get from point A to point B and help her solve her problems.”

Who is a Good Candidate?

Obviously, not every seller will be easy to get on board. In some cases, the seller and/or property might not even be a good fit for the auction method. Sometimes, the seller knows very little about the auction process. Some of them have set unachievable goals and lofty expectations. Others take offense to having to spend money on marketing their property and sale, while others have an unrealistic deadline in mind. “Not all properties are suited for auction,” Puffenbarger said. “I have turned down some – it just wasn't a good fit; the equity wasn't there, or their expectations weren't where they need to be, but that's what I look for when go in to talk to someone – what is your motivation?” Similarly, Wilson begins the conversation with sellers being as straightforward as he can by asking them, “What are your goals and aspirations?”

When allowed to speak without interruption, they often reveal essential details that will help determine if they are a suitable client. “I'll ask that question,” Wilson begins, “but one of the hardest things to we as humans have to do is shut up. Just be quiet. They'll tell you everything.” The follow-up question, which is “How did you find us?” is equally important, as the seller will go into what led them to seek out the services of an auctioneer, often revealing precisely what they know about the auction method, which will help auctioneers determine if they're a good candidate to work with.

Gaining Referrals

Imagine drumming up $7.8 million in sales over the course of three years – all from a single referral that snowballed into many more. It happened to Wilson, and it all stemmed from a game of golf. Several years ago, when he was involved in automotive salvage and parts auctions, he hit it off with a gentleman who owned auto parts stores during a golf outing. He told Wilson they had a rental property that wasn't working out for them and asked Wilson to handle the sale. 

“Everything you could imagine to have to deal with was part of the sale, and for not a lot of money,” Wilson said. “We worked just as hard on it as we would a million-dollar place. We won his trust, everything was great … I kept looking at the tentacles that came from him – (these referrals) all came back to that one relationship. He believed in what we did. He saw it firsthand.” And it doesn't take rounds of golf to gain referrals. Wilson said that simply asking a client at the end of a job, “Do you know one person that we may be able to help?” can be beneficial. 

“They may not have that answer right then,” he said, “but when you follow up with them in a few days or a week, 50 to 60 percent of the time, you're going to get a name.” You can also motivate referrals by rewarding those who help you. Puffenbarger, who partners under the Nichols Auction Group umbrella, said Nichols sent out more than $100,000 in referral checks last year.

“If my friend sends me a half-million-dollar farm and I send him a referral check and say, ‘thanks for the phone call,'” he said, “you better believe he all the sudden becomes an auction evangelist. He'll start looking for properties that work because he just made a few extra bucks and didn't have to do a whole lot of work for it.”

This article is based on a session from NAA's 2023 Conference & Show entitled "Real Estate Seller: How to Connect, Convince, and Close the Deal." Watch it now on The Auction Institute®.