5 Fool-proof tactics to buying at auction
There are very few clients of mine who are excited about bidding at auctions. They certainly favour the seller, however, if that dream property comes along and is going to auction, you may have to face the inevitable. Below are the tactics I have seen to be most effective over the years.
Try to have an offer accepted prior to auction day
The best auction strategy is to avoid auction! This strategy avoids any emotive buyer raising the price above the market value. Speaking to numerous buyers agents, they often put an offer in prior to the auction to secure the property early. You may be able to have an offer accepted by helping the seller through other conditions eg shortening or extending the settlement date, offering to rent the property back to the seller if needed etc. This may meet the sellers needs and tempt them to take the offer and lock away the deal.
Set your limit on an uneven number
One tip which often can see a sneaky win is setting your purchase limit on an uneven number. I have had a number of client win at a bid just over a round figure. Instead of setting a limit at $500,000, set it at $507,450. There may be other bidders who cross their arms and stop bidding at $500k, giving you the final bid to secure the win!
Set emotion aside once the auction starts
Easier said than done, right? The day prior to auction when talking to my clients I always remind them that the outcome of the auction is generally out of their control. There is little they can do if a cashed-up buyer is prepared to pay more than they are on the property. They cannot control the expectation of the seller. Some buyers opt to have a family member or close friend make the bid on their behalf as they can bid purely on the limit set.
Stand where you can clearly see the other bidders and auctioneer
It’s important the auctioneer clearly sees your bid and for you to keep track of who is bidding against you. It is surprising what you will pick up watching the other purchasers put their bid forward. The best spot is on the side so you can see the crowd and the auctioneer.
Bid with confidence
If you are not confident, fake it! As stated in the intro, everybody else is as nervous as you are. Stand up, put the bids forward with a loud voice and make sure they know you are there to buy.
To discuss your bidding strategy, speak to the team at Birdie Wealth.