Hammer Talk – Best time of day to auction
It’s the question we get every time our clients want to book an auction. “What is the best time to auction the property?”
At Axford Auctions we always held the opinion that first up in the morning or last in the afternoon were the best times. Our theory was set around selling in isolation just like selling in February or the Winter months is optimum, as supply of property is low yet demand remains strong. As the saying goes, “sellers are seasonal, buyers aren’t.”
It’s now time to test our theory against reality, the hard facts that can not be debated. Below are the results of our data from the past 3 years and over 1,000 auctions.
Over the past 3 years our auctions held between 9AM and 10:30AM have enjoyed the strongest clearance of 74%, showing that the early bird really does get the worm whilst the middle of the day has the weakest clearance of 68%. We use the term “weakest” very loosely here as we know that a normal auction market sits at 50% clearance so any clearance rate over 60% we are experiencing an above normal market.
So why is the morning the strongest? We feel there are two reasons.
The first relates to supply and demand. 55% of our auctions take place in the middle of the day being from 10:45AM to 2:30PM. This is the time of day when the most open homes and auctions take place. Only one fifth of our auctions are conducted in the morning slots which means there is less property showings and auctions taking place.
The theory of selling in isolation is about limiting choice. At 9am you are the first auction of the day and typically are in no competition. Being first auction of the day also delivers the competitive advantage that if buyers are looking at 2 or 3 auctions on the one day, being first means you have the pick of the buyers.
I had experience recently where we had a 9am and 11:30am auction in a similar area with similarly priced property. The buyer at property one was also very interested in the second property and was expected to be the top buyer for both. Being first auction of the day meant our owner, who didn’t fear 9am, capitalised by having all the buyers at their auction without fear that they would buy something else on the day before their sale.
The second reason why first-up morning auctions deliver the best results is purely due to biology and psychology. We know that our energy levels are at their best in the morning. The body is well rested and at its most alert and focussed. When we feel our best the positivity flows through. Generally, there are few things that can go wrong in the morning. I find the buyers at these auctions have their strategy in place and don’t hesitate into competitive bidding. This is where the psychology comes in. The difference between the morning and afternoon auctions can be the time it gives buyers to think and second guess themselves. Doubt now comes into play. Our advice is let the early bird get that worm.
With this in mind, it doesn’t mean that all auctions in the afternoon are now doomed. The clearance rate from auctions held at 2:30-4PM still sits at an impressive 72%. What we at Axford Auctions have seen over the past 3 years is an increasing trend in auctions after 4PM being up to 5:30PM and even 6:30PM in daylight savings months. Volume and the clearance has been on an upward trend and so far in 2017 we hold a 100% clearance rate. On Saturday 25th of February we auctioned 63 Pretoria Parade Hornsby at 5:30PM, with 130 spectators and 12 bidders we sold for $1,530,000 being $180,000 above our set reserve.
Psychology now returns into play, as the day wears on and focus for buyers starts to diminish, desperation now becomes a key factor. If a buyer has missed out on several properties throughout the day, emotion begins to play a key role. The thoughts of “if we don’t buy this one how much will the next one go for?”, begin to run through their head. A buyer who was 50/50 on this property now sees it as a priority as again there is minimal choice.
Facts and figures aside, you can have the best time of day and the best market to sell in but if all the work in the lead up isn’t done from marketing to working with buyers and the seller then the result won’t be the very best. It’s the collaboration of a four week campaign and an agent/auctioneer duo that know how to get the best result.