How Do You Bid at an Auction? Insider Tips to Win

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

There's a fundamental paradox when it comes to auctions. The process is promoted as the most transparent way to trade property. You get a multi-week marketing campaign with plenty of opportunity to inspect the home and carry out due diligence. On auction day, everyone's presented with identical terms and conditions. You've had the chance to speak to your financier and arrange for a loan.

Then, when bids are called, all registered bidders can raise their paddle while monitoring the competition. As it nears the pointy end, you can see what the market's offering and a decision is made on whether it will sell under the hammer or not.

Once that hammer drops – it's done. Arm's length, fully exposed, and on a level playing field... right?

Well, no. Not really.

I’d wager you’re actually missing out on homes far more often than you’d like at auction as an everyday buyer. The truth is that when it comes to how do you bid at an auction, the process is stacked against you. Fortunately, there’s also a solution to help get you back in the game.

The selling expert

While the person who owns the home usually isn't a property professional, the one representing them absolutely is.

Selling agents are in the business of marketing property daily to achieve the highest possible price for their vendor client. They know exactly what levers to pull and what buttons to push to achieve their goal of maximising the result for their seller.

This is doubly true when it comes to an auction campaign.

The selling agent will be in contact with all potential buyers throughout the campaign. They'll know which have come with finance in place and serious intentions of buying. They'll understand those who are bidding with a clear, practical head on their shoulders, and the buyers who are in love with the property and making offers based on their heart's desire. They will know which buyers have requested contracts and made request for changes to special conditions.

They'll draw on all this information and play off one buyer against another. Come auction day, they'll have used every method at their disposal to ensure bidders are forced to go as high as possible. A good sales agent should have a clear idea prior to auction which particular buyers are likely to succeed.

And if the auction stalls, they're on hand to advise their selling client on how to progress the matter. They and their team will also be very actively negotiating with all potential buyers, encouraging them to up their bids to secure the home.

You're dealing with a professional who does this every day, and that means you are at a distinct disadvantage.

The auctioneer

A great auctioneer is like a talented orchestra conductor. They're always in control of the room, the rhythm, the audience, and the players.

They understand when to go for the big bids and when to let things progress incrementally. They can create anticipation, build tension, and relieve it with humour when needed. They know how to extract that extra bid when you think you're done. Just when you think it is over – they hold – and hold a bit more, dragging out the auction to exhaust every possible bidder.

The auctioneer and the selling agent are on the same team – and that's the one trying to get you and everyone else to pay the highest possible price for the home.

Professional buyer competition

Here's another factor that many everyday purchasers often overlook in their auction experience: their competition frequently includes buyers' agents who know exactly how the game is played.

And they're representing someone who's competing directly against you for the property.

Buyers' agents are increasingly prevalent at auction events. Like selling agents, they too are professional negotiators with a deep understanding of the markets they operate in. They'll have asked a range of questions to understand the vendor's motivations. Their due diligence will be far more comprehensive than yours, and they'll know what represents good value in the current market.

Buyers' agents also have established working relationships with selling agents in their service areas. They'll have gathered information about the home that you won't have researched or even known to ask about.

These buying professionals are entirely comfortable with the auction experience. There are no nerves – just focused determination to secure the property at the right price and on acceptable conditions.

Another reason you're on the back foot against a buyers’ agent client is that their professional has prepared them thoroughly for the auction. The buyers’ agent has guided their client throughout the entire process. They'll ensure finance is rock-solid and that the property genuinely suits their client's needs. They have confidence in setting their bid price limit and will ensure their client doesn't overpay for the property.

Buyers' agents also understand precisely what happens after the auction event if the home doesn't sell under the hammer. They'll be immediately onto the selling agent discussing what would be acceptable contract terms, while pushing their own buyer's agenda to help secure the deal.

Make no mistake, you're considerably disadvantaged when you come up against a professional buyers’ agent.

The success solution

Winning at auction can be incredibly tough, especially when it's being run by an experienced auctioneer representing the client of a skilled selling agent, and you're bidding against specialist buying agents who do this for a living.

You're bringing enthusiasm and emotion to a professional negotiation. They're bringing expertise, market knowledge, and strategic thinking.

The remedy is straightforward. Be the buyer who has experience, skill, and professionalism on their side too. Before you begin searching for your dream home, contact our Propertybuyer team to discuss how we can guide you through the buying process. With a professional negotiator on your side, you can avoid the pitfalls, stress, lost hours, and the extra cost of overpaying for a home. We are your safety net when the process is stacked against you.

To have one of our friendly Buyers' Advocate's contact you, click here to:

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