If you’re planning on buying a residential property in Australia, chances are you’ll be facing the prospect of an auction and if that’s the case, you’ll be wanting some auction tips before going in cold.
Buying a property at auction can be a daunting affair for a newcomer. Most places that sell via auction usually do so due a high level of interest. This desirability factor results in an auction instead of a sale by contract, as an auction should deliver the vendor the highest possible price.
With so much interest in these types of property, it can be easy to get caught up in the excitement and wind up in a bidding war! So let’s get you set up with some red hot auction tips to keep your mind clear and your feet firmly grounded in reality.
This means setting yourself an unwavering top price. Write it on a piece of paper and hold it in your hand if you need to remind yourself. Not only will this keep your goal clear, it could save you making the terrible mistake of financially overcommitting yourself!
As soon as your upper limit is exceeded at an auction, you can quietly slink to the back and console yourself with the knowledge that you played it smart and showed the necessary self control.
Even if you’ve never experienced a real life auction, you undoubtedly have witnessed the fast-paced, crazed excitement of this particular form of sale through film or TV. Staying calm and avoiding emotional or hot-headed bidding is an absolute must.
Maintaining your composure even when you’re in the thick of bidding will, without fail, be a better approach. Try not to feel pressured into making decisions based on the crowd around you or by the auctioneer, whose job it is to keep the momentum moving forward and the bids rising. And definitely note that their signature ‘third and final call’ is often repeated many times. Take a beat and breathe.
We’ve established that auctions can be hectic events and sometimes it can be difficult to understand exactly what’s going on, especially if there are other participants in the auction who aren’t able to bid according to the advice of the previous tip!
The person who knows exactly what’s going on is the auctioneer, so listen to them when they speak.
Not literally, because thankfully no one’s going to make you identify all the squares with bicycles, but you should never mix money with emotion. Approach these situations as robotically as possible.
Applying Asimov’s three laws of robotics may be a little extreme but we can modify his rule of three to being polite, professional, and unemotional. You’re likely to encounter many of the people you see at an auction time and time again so play it cool and you won’t get anyone offside.
If you’ve ever played and won a game of poker, then your nerves might be just right for bidding at an auction. There will be times when your limit is quickly reached and you’ll have to fold.
However, if the auctioneer or other bidders increase the bid amounts, but you’re only comfortable going at a slower pace, you can still bid in smaller increments. Again, listen to the auctioneer — they may allow this slower pace and that could be all the time you need to feel comfortable either upping your own bid or walking away.
Auctions are like trivia nights — you don’t want to yell out the answers and help the other teams by blurting out what your limit is or if you’re close to throwing in the towel. If you’re bidding with a partner, hopefully you’ve worked out your strategy well in advance and will have developed a series of hand or facial gestures to convey information between yourselves without giving the game away.
Most importantly, if you’re buying with someone else, decide well ahead of time who’s going to do the bidding — the last thing you want is to accidentally bid against each other! This tip’s worth more than a jug of beer.
The temptation to throw out a huge final bid to secure the property might seem like the winning move, but proceed with caution. This type of knockout bidding can push the final price significantly higher than the other bidders were willing to offer. You don’t want to pay thousands more than the second highest bidder just because you want to win. There’s no need to go for the jugular when the prey is already down.
This one is probably the hardest for most people and is adjacent to lines like ‘dress for the job you want’ and ‘fake it ‘til you make it.’ The more prepared you are and the more confidence you have, the greater your chances are for success. If you feel like you’ve got ‘the goods’ in the confidence department and want to leverage them, there are ways to demonstrate that.
Bidding swiftly keeps you in control and prevents the auctioneer from dictating the pace. It also demonstrates your seriousness and commitment to the property. You could also consider opening the bidding as a power play. This demonstration of confidence shows that you mean business. If you’re unable to muster this type of chutzpah, then just refer back to Tip 2, because as being calm comes in a close second to having confidence.
Whatever your personal approach to home buying is, having these auction tips in mind can only help you. There will be many auction days ahead on your journey to home ownership and being prepared is the best strategy
