This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
When bids are called for, the man on the block must use another great natural law - action and reaction. This may be illustrated with a piece of rubber band. If we stretch a rubber band and continue to stretch it beyond the breaking point, it snaps and we have a smaller piece of rubber. If we repeat the process with the smaller piece, that too will snap and leave a still smaller bit, and, mind you, with less vitality. If, on the contrary, in stretching our rubber band, we "sense" when it is approaching the breaking point and let it down, we can continue to work with that band without having it snap.
The same condition is present in the human mind. If we talk and talk and shout and shout at the people beyond measure, we soon have them up to such a pitch that, like the rubber band, their tension will snap. When this happens, some of them, including bidders who are really interested, may leave without buying. Instead of talking at them in a continuous strain, we should ease them up at times, using the law of "action and reaction."Suppose we are selling the property No. 1563 Broadway. The bids have started at $15,000 and have been raised in jumps of from $1,000 to $5,000 to $60,000. Action is very keen and the audience begins to get pretty well strained. The auctioneer, to ease up things (reaction) calls attention to some amusing incident in the audience. The audience, because of the strain, is ready and glad to relax and enjoys the little respite. This rests them, and the auctioneer proceeds with the bidding. If the auctioneer himself has the proper balance and avoids over-straining the audience, he will finally bring the bids up to the value of the property and so get the proper result. In this, as in a private sale, the auctioneer is really bringing about a balance between the owner and the buying public.
The letting down of the tension, however, must be very skilfully handled, for it is possible to make your interruption of such a sort that it breaks up seriousness and takes attention entirely away from the property. The interruption should be of such a nature that it will lower the tension from bidding, but not divert thought from the scene of action. Interruptions before the tension point is reached are dangerous. For this reason, the auctioneer must be able to answer questions from the audience instantly and in few words, and in such a way that they do not disturb the growing attention. One reason why the little interruption frequently leads to better bids is that it gives bidders a moment or two to think the value over for themselves and to feel that their judgment is not being overbalanced by the excitement of bidding. And the public must remember that at an absolute auction sale the value of the property is not necessarily what expert appraisers would rate it, but no more nor less than what it actually brings from the block. The auctioneer, in sensing when tension is getting too strong, must, therefore, be guided by his understanding of his audience and what they will finally bid rather than by any preconceived notion of appraisal value.