Auctions are becoming an increasingly popular way for people to buy and sell homes, but the process behind them - and the role of the person in charge of ensuring they go off without a hitch - remains somewhat of a mystery.
Here, Property Investor Today exclusively checks in with Andrew Binstock, co-founder, director and auctioneer at Auction House London, for this thoughts on how he got into auctions in the first place, what a typical auction day involves and what it takes to be a good auctioneer.
Tell us about Auction House London. When and how was it founded?
AHL was born in 2010 – previous to that we were trading under Sutton Kersh Binstock from 2006-2010, holding auctions in Liverpool. Sutton Kersh still have an auction house and I still act as auctioneer for them in the North West. I must have done over 100 auctions for Sutton Kersh and Sutton Kersh Binstock before that.
I met my new business partner Jamie Royston and we were approached by Auction House UK to become its London office. We rebranded to Auction House London and held our first auction in the March of 2011.
How did you get into auctions in the first place?
I graduated from Birmingham University with an accounting degree in 1997 and then tried my hand at various careers, including stand-up and TV presenting. That didn’t go so well (laughs) so in 1999 I joined Allsop on their graduate programme and was placed on their auctions team.
After the graduate programme ended, I soon became a full-time employee. But I left in 2001 because I knew I wasn’t going to get any further there. I was young and was never going to be on the rostrum.
I wanted to be an auctioneer but Allsop already had two very experienced auctioneers in place. I had entered a number of auction competitions and performed well, but I knew if I wanted to be an auctioneer I’d have to go elsewhere.
There are two ways of becoming an auctioneer – you’re either asked to do it by the company, auction house, you work for, or you set up on your own. I decided to set up my own business because I know it wasn’t going to happen for me at Allsop.
I was introduced to James Kersh, who established Sutton Kersh Auctions in 2002, and blagged to him that I was a professional auctioneer even though I didn’t really know what I was doing. Luckily, the market was very strong at the time and we had something like a 95% success rate at the first auction I did. I've been doing it ever since.
What does a typical auction day involve? Do your preparations start early?
While auction day for me only happens on 15 calendar days of the year (8 a year for AHL, 7 a year for Sutton Kersh), a lot of preparation goes into that day. We get to the auction early and start prepping everything ahead of the auction starting.
I start getting in the zone and doing my checks. Checking the reserve prices, running through the addendums, making sure that everything is present and correct.
I also run through the telephone and proxy bids, with the proxy bids in many cases coming in at the last minute from people who thought they could make it but now can’t come. There is usually 20 or 30 bids to register at the last minute, so a lot of work for my team late on. Lots of organisation is needed.
You are on stage for over three hours, barely pausing for breath or a sip of water. How do you find the energy and stamina to keep going?
I think I’m right in saying that I’m the only auctioneer in the UK to be on stage for the whole three or four hours. That’s not the norm. Most auction houses will have two or three auctioneers who do 25 or 30 lots and then have a break, while I do every single one of the 130 or so lots at our auctions.
There are smaller auction houses, of course, with 15 or so lots, where one person will handle it – but in terms of doing 130 lots on their own, I believe I’m the only one in the UK doing that.
It’s a personal choice but also a necessity. I am the only one in my office who can do it. There isn’t another professional auctioneer on hand to step in. Most other places have three auctioneers rotating.
Lots of OJ gets me through – my team are regularly bringing me OJ. And, of course, the adrenaline keeps me going. I’m exhausted at the end, but during the auction I’m not.
There's definitely a theatrical element to the auction process. Is this something you’re conscious of? Do you feel like you need to put on a performance?
Absolutely, yes. I’m a failed comedian, that’s what I always wanted to do. So this is like my second chance, and the showman in me wants to put on that performance, wants to have that engagement and interaction with the audience.
Auctions are notoriously boring affairs. In many cases they are a long, dull afternoon for those in attendance. I don’t want someone who’s here for Lot 20 to stay only up until then and then leave, I want them to stay until the end. I quite often have people coming up to me after and saying that they were only planning to stay till 2, 2.30pm, and then next thing they know it’s 4pm.
That’s what I want – to make it enjoyable and fun.
What is an auctioneer’s actual role during the auction process? Simply to get the highest possible value for a property?
My job is to engage the audience and get them going, to get bidding wars started. You have to engage the audience otherwise nothing would happen, everyone would be very reluctant to put their hands up.
My job is, of course, to get the best possible price, but it’s also to create an environment where people don’t want to lose. I have little tricks, little nudges, subliminal messages I can give with my body language to encourage people to bid.
There is a structure and skill in engaging those in the audience to bid, to put their hands up. It has to be rhythmic, you have to create that. If someone has a figure in mind that they’re prepared to stop at – say £250,000 – it’s my job to try and get them up to £251,000. I can do that with the words I say, the body language I use.
As you saw the other day, (Property Investor Today attended Auction House London’s first auction of 2020 a few weeks ago, where an incredibly fierce bidding war for the first property kicked off proceedings), if you create that environment where people don’t want to lose, fierce bidding wars are then more likely to take place.
What are the long-term plans for AHL? Is there a specific game-plan now that we’ve entered a new decade?
To keep growing. We started as a 20-lot auction business; we now have a 130-lot auction every auction. We started with two people and now we have a team of 12.
We are keen to keep growing in the next decade, like any small or mid-sized business. We are probably at the small end of a mid-sized company, so we are keen to grow the business, offering more lots, working with more new clients and gaining new business.
With the uncertainty surrounding Brexit a thing of the past (for now), have you seen an influx of confident/eager buyers – or have things remained the same?
Yes, definitely. We had comparatively quiet October and December auctions. The results were OK, but the amount of lots and bidders was definitely down. And that had to be due to nervousness, down to the uncertainty of Brexit and the general election.
At the February auction you attended, there was around 600 in the room at the start, double the number in December. Bidding wars were frantic with the desire there from people to win property. In two months the mood had changed completely.
What would your advice be to a prospective auctioneer?
You need to be very strong at mental arithmetic. And have some kind of acting or public speaking background. There are lots of people who think they can auction well, because they have experience of public speaking, but they quickly realise how difficult it is, how many components there are.
It’s difficult not to mess up. There is so much to keep up to speed with. The reserve price, which property you’re selling, what the bids are, who’s bid for what, the proxy and telephone bids, which increments to go up in, plus engaging and encouraging people to bid.
There are lots of traits would-be auctioneers would need. A personality that people like to hear and engage with is key.
There is also a lot of responsibility on your shoulders. As an auctioneer, you are creating a legally binding contract every time you speak and bring the gavel down. If you bring the gavel down on the wrong number, as some auctioneers have, there is no coming back from that.
There can be a big cost in legal fees and litigation if you make a mistake. It’s not like a little charity auction, we’re talking about potentially hundreds of thousands of pounds worth of problems for people if a mistake is made.
It’s a huge responsibility – you are dealing with people’s most valuable, prized assets. People need to bear in mind that it might look fun and easy on Homes Under the Hammer, but it’s a lot of work, a lot of responsibility, a lot of plate spinning.
*Andrew will be at the helm for AHL's next auction on Wednesday 25 March, taking place at the London Marriott Hotel Regents Park. You can view all the lots and request a catalogue here.