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Fri 3 May '24 with Rich Harvey Unpacking the Northern Beaches with Incredible Agents
 
 
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Auction Winning Tips - June 2024

June 14, 2024 / Written by Rich Harvey

 

By Rich Harvey, CEO & Founder, propertybuyer.com.au

 

There's nothing quite like the excitement of a live auction! Having attended hundreds, I'm always captivated by the energy - the buzz of the crowd, last-minute price calculations, the auctioneer's skillful rhythm, and the agents' tireless efforts to secure the best price. Sometimes, there's even complimentary coffee and snacks! 

Yes, auctions offer an electrifying experience for Australians of all backgrounds, but there's a strategic side to securing your dream property under the hammer. To navigate the process confidently, here are my top 10 Auction Tips to help you achieve a positive outcome.

1. Set a “hard” top price: The Cornerstone of a Winning Auction Strategy

Auctions are designed to be thrilling – the fast pace and competitive atmosphere can easily push you beyond your comfort zone. This is why setting a hard "top price" is the cornerstone of any successful auction strategy.

Don't let the selling agent or the auctioneer's tactics pressure you into overspending. Determine your absolute maximum budget well before the auction and stick to it, no matter what. Think of it as your "pain point" – the price where every additional dollar feels unbearable.

This approach ensures you stay emotionally detached and focused during the bidding process. Auctioneers are skilled at building excitement, and agents will try to nudge you higher if they sense hesitation. Having a predefined limit prevents them from swaying you beyond your means.

2. Stay calm and collected : mastering auction bidding strategy

The auctioneer might exude an aura of unshakeable confidence, using booming vocals, witty remarks, and dramatic gestures to encourage higher bids. Don't be fazed by this performance! The auctioneer's primary goal is to maximise the seller's profit, but even they can be flustered when a bidder takes their time.

Maintaining composure is crucial for a winning auction bidding strategy. Don't feel pressured by the auctioneer's attempts to keep the momentum going. Their signature "third and final call" is often repeated many times over before the hammer truly falls. Take calculated pauses to assess the situation and avoid impulsive bids exceeding your limit.

3. Listen & stay informed

The auctioneer acts as a vital information hub during the proceedings. They'll announce the current highest bid and bidder, and crucially, whether the reserve price has been met. Additionally, they might disclose any special conditions offered by the seller, such as a longer settlement or lower deposit, before the bidding even starts.

This is why active listening is essential! Heeding the auctioneer's announcements is a key auction tip for buyers. It prevents costly mistakes like bidding against yourself or accidentally placing a bid lower than the current offer.

4. Be polite, professional and unemotional

Emotional outbursts achieve nothing at an auction. Maintain a professional and courteous demeanour throughout. The auctioneer's urgency is part of their job – it's not a personal attack. Staying calm, focused, and unemotional are crucial auction tactics.

This applies to other bidders as well. Some might try to intimidate you with intense stares or aggressive gestures. Don't get drawn in. The auctioneer is there to maintain order, and they have the authority to remove disruptive bidders, as I've witnessed firsthand.

Overall, emotional control is key. The atmosphere will be buzzing, with people vying for your attention and trying to heighten the excitement. Whether you feel anxious, angry, or overly enthusiastic, keep those feelings in check. Remember, this is a financial transaction. Avoid costly mistakes fueled by emotions – a clear head will help you secure the property at the right price.

5. Consider opening the bidding : a strategic move (Optional)

While the opening bid seldom wins the auction, placing it can offer a few advantages:

  • Sets the Pace: You initiate the bidding process and demonstrate your serious interest to the seller and agents.
  • Potential Incentives: Some auctions incentivise the opening bidder with small gifts like a bottle of wine or a gift basket.

6. Don't get swept up : bidding in smaller increments 

The auctioneer might suggest larger bids as the excitement builds, but don't feel obligated to follow their lead. Here's how taking control of the pace can work to your advantage:

  • Strategic Slowdown: As the auction progresses and you near your limit, consider bidding in smaller increments like $1,000 or even $500. This can signal to other bidders that you're nearing your top price and potentially encourage them to raise their bids more aggressively.
  • Reading the Room: Be mindful of the body language and reactions of other bidders. If they hesitate or seem uncomfortable with the larger increments, your smaller bids might be accepted by the auctioneer.
  • Stay Calm Under Pressure: The auctioneer might initially reject your smaller bid. Don't panic! Maintain your composure and stick to your guns. If others become hesitant to bid further at the higher increments, the auctioneer will likely return to you for your lower offer.

7. Project confidence : The Power of rapid bidding

Confidence can be a powerful weapon in an auction. Here's how quick bidding can work to your advantage:

  • Intimidation Factor: When the increments reach $1,000 or less, maintain a rapid pace with your bids. This can make other buyers feel pressured and unsure of your limit, potentially leading them to hesitate or drop out.

  • Maintain Control: Quick bidding keeps you in control and prevents the auctioneer from dictating the pace. It demonstrates your seriousness and commitment to the property.

8. resist the "knockout bid" Trap

The temptation to throw out a massive final bid to secure the property might seem like a winning strategy, but it can backfire. Here's why:

  • Overpaying is Real: A "knockout bid" often pushes the final price far beyond what other buyers are willing to offer. This can leave you paying significantly more than necessary.

  • Focus on Value: Aim to win the auction for slightly more than the second-highest bidder. This ensures you secure the property at a competitive price that reflects its true market value.

9. plan out your bids discreetly : Avoid Last-minute Panic

It's surprising how often couples discuss bidding strategies out loud during auctions. This can be a recipe for disaster!

The Key: Pre-Auction Planning and Communication

Before the auction even starts, you and your partner should have a clear communication plan in place. Discuss your limits and bidding strategy beforehand, not in the heat of the moment surrounded by competitors.

Keep Your Cards Close:

Write down your pre-determined bidding limit on a discreet piece of paper and keep it hidden in your pocket. Sticking to your plan will help you avoid emotional decisions and potential overspending.

10. Read the room

Experienced auction participants can interpret subtle cues to understand when someone is finished bidding. Watch for these signs:

  • Body Language: Look for crossed arms, slumped shoulders, or dejected facial expressions. These can indicate a bidder nearing their limit.

  • Disengagement: If a competitor pockets their bidding card or starts moving away from the auction area, it might signal they're ready to drop out.

Your Advantage: Spotting When to Strike

These body language cues can be a valuable tool for strategic bidding. As a Buyer's Advocate, I'm skilled at deciphering these signals and knowing when to make a move to secure the best possible outcome for my clients.

The Power of a Buyer's Advocate:

Auctions can be a fast-paced and stressful experience, especially for first-time buyers. Navigating the bidding process, deciphering competitor signals, and keeping your emotions in check can be overwhelming. That's where a Buyer's Advocate, also known as a Buyer's Agent, becomes an invaluable asset.

Your Trusted Advisor Throughout the Process:  A Buyer's Advocate acts as your personal champion throughout the auction journey.  They'll provide expert guidance and support, helping you:

  • Develop a Winning Auction Strategy:  They'll work with you to understand your budget and risk tolerance, crafting a tailored bidding strategy that maximises your chances of securing the property at the right price.

  • Expert Auction Day Support:  On auction day, your Buyer's Advocate will be by your side, managing the bidding process on your behalf.  They'll interpret competitor signals, ensure you stay within your predetermined limits, and advocate fiercely for your interests.

  • Skilled Negotiation:  Their negotiation expertise extends beyond the auction floor.  Should the property pass in (fail to sell at auction), your Buyer's Advocate can leverage their negotiation skills to potentially secure a favourable outcome through private negotiations with the vendor.

Benefits Beyond Auctions:  A Buyer's Advocate's value extends far beyond auction bidding.  They can assist you with:

  • Property Appraisal and Negotiation:  Gain an edge with accurate property appraisals and ensure you're not overpaying.  Buyer's Advocates leverage their negotiation skills to secure the best possible price for you, even in private sales.

  • Nationwide Expertise:  Propertybuyer boasts a network of experienced Buyer's Advocates across Australia, including major cities like Sydney, Melbourne, and Brisbane.  No matter your target location, you'll have access to local market knowledge and expert guidance.

Invest with Confidence :  By partnering with a Buyer's Advocate, you gain a competitive edge in the property market.  They'll handle the complexities, allowing you to focus on your investment goals.

Ready to unlock the power of a Buyer's Advocate?  Contact Propertybuyer today for a free consultation and explore how our Buyer's Agents in Sydney, buyers advocate in Melbourne, Brisbane, or other locations can guide you towards a successful property purchase.

Don't miss out on this valuable resource!  Explore our comprehensive services, including auction bidding services in Sydney, Melbourne and Brisbane, property appraisals, and negotiation expertise.  Visit our website or contact us for a free consultation and take your property investment journey to the next level.



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The Propertybuyer
Podcast

 
Sun 23 Jun '24
with Rich Harvey
Why Tax Depreciation Matters
 
 
Fri 14 Jun '24
with Rich Harvey
Tax Effective Property Investment Strategies
 
 
Fri 24 May '24
with Rich Harvey
Granny Flats: Boost Your Yields & Faster Mortgage Repayments
 
 
Fri 3 May '24
with Rich Harvey
Unpacking the Northern Beaches with Incredible Agents
 
 
Fri 29 Mar '24
with Rich Harvey
How to build a $7 Million Property Portfolio from scratch
 
 
Sat 16 Mar '24
with Rich Harvey
Why Invest in Melbourne?
 

 

Listen to many more
podcasts on our
Podcasts page.