Bidding at auction is nerve wracking for most people.
Over the last 20 years we have helped hundreds of our clients successfully purchase their dream home or investment property at auction and have put together a list of useful tips and strategies for bidding at auction.
If another buyer has significantly deeper pockets than you do there really is nothing you can do to improve your chances of success. However if it’s a close race to the end, adopting certain strategies can be a useful way of improving your chances of coming out on top – and not paying too much at the same time!
1.Before Auction Day
Make sure you have done your due diligence
Have a professional legal expert inspect the contract of sale and have confirmation in writing of any changes you would like to make to the terms and conditions.
Have a building inspector examine the property to ensure there are no structural defects and a pest inspector to give the all clear for pests such as termites.
Make sure you have done your pricing research on the property
It’s really important to know the value of the property in the current market. Make sure you are familiar with recent comparable property sale prices. Ask agents what has sold recently in your area and keep an eye on the weekend auction results published weekly on websites such as Domain. If you are still unsure about market value talk to us about a property appraisal.
Attend as many auctions as you can
Get familiar with what happens on auction day. Take a look at how others bid, how agents negotiate the crowd and how the auctioneer operates. The more familiar you are with the whole process, the less nervous you are likely to feel bidding at auction on your auction day.
Attending local auctions will also give you a good feel for the level of competition that exists in your chosen area from other buyers.
Determine your auction strategy and the maximum price you are willing to pay for the property
A skilled auctioneer can be very diligent at extracting a higher bid from you than you had anticipated, so it’s vital to have thought about your strategy and price carefully beforehand – and then stick to it on auction day.
And it surely goes without saying – make sure your bank finance has been approved and you have this in writing from your lender before bidding on any property!
2. On Auction Day
Dress for success
Sometimes even a simple thing like dressing smartly in a suit or wearing a jacket can boost your confidence, and it can give the impression to other buyers that you have a large budget – a bit of the intimidation factor!
Arrive at the auction early
There’s nothing like being in a rush or getting caught in traffic and running late, to up your stress levels for what is already an incredibly stressful experience! Arrive at the property with plenty of time to spare, register to bid and take in your surroundings and the competition as they arrive.
Pick a position in the crowd where you can see the action
You want to be able to see the auctioneer (and he or she clearly see you), plus the other bidders. Pick somewhere you can get a good view.
Don’t be scared to open the bidding at auction – and do so with confidence
Often there is a “silver-lining” for the first bidder in a bottle of French champagne. Even you don’t end up purchasing the property you still walk away with something nice to soften the blow!
Spell out your bid
Instead of saying 9-50, say nine hundred and fifty thousand dollars. It sounds like more money and may help weed out some of the weaker buyers.
Don’t be intimidated
Once your bidding is underway, run your own race – don’t let anyone – agent, auctioneer or other buyers intimidate you to change your strategy. Keep the bidding increments low, quick and confident.
Act confident bidding at auction even if you really don’t feel it
Your body language can easily give away when you are almost at your limit. Hunched shoulders, a dejected look or constantly conferring with a family member or friend before placing every bid, will let other bidders know you are almost there.
Bid without hesitation and with confidence as if you have thousands still left in your wallet, right down to your very last cent. You never know how close the other bidders are to their limit and if you remain super-confident they may just bow out.
When a property passes in
If the reserve price has not been met at the auction, don’t let the auctioneer or agent to pressure you to bid higher – and against yourself. It is better to have the property pass in and be in the box seat in the negotiation process with the agent. As the highest bidder you have the first right to negotiations and can often come up with a mutually acceptible price in the moments after the auction.
Good luck on auction day. We hope you find these tips helpful. If you are still feeling unsure and would rather a professional do the bidding for you, talk to us about our auction bidding service.
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