Buying a property can be stressful and gruelling, especially if you’re faced with out-bidding other potential buyers at auction.
27 May 2016
With Sydney and Melbourne’s auction clearance rates picking up momentum, buyers are becoming anxious that increased competition will lock them out of the market. Emotion and nerves play a big part in any auction. Aggressive bidders may, subconsciously or tactically, scare-off other buyers to prematurely stop them bidding. On the flip-side, these tactics sometimes intimidate bidders to go beyond their means – just to stay in competition. So how do you beat out everyone else and secure the property of your dreams? Here are our dos and don’ts.
Stand with your back to anyone – you want to be able to see everything that’s going on, from the auctioneer to the real estate agent, but most importantly all the other bidders.
Bid too early – while there’s no need to wait right until the end to enter the auction, you also don’t need to be the first. Hang back and get a feel for what’s happening. Are the other attendees neighbours or real buyers? Does the leading bidder seem confident?
Doubt yourself or lose your cool – know your price ceiling before you arrive and stick with it. Don’t discuss this during the auction with anyone, not even your partner or friends. Other bidders will feed off any uncertainty, so know your strategy before you arrive.
Let real estate agents push you around – don’t do anything you aren’t comfortable with, even if the agent tells you to. Don’t go any higher than you can afford and don’t disclose any personal details regarding your personal financial or current living situation. An agent that knows your rental lease is about to run out will smell blood.
Let the auctioneer control proceedings – some auctioneer’s may drive up prices by creating hype and anticipation. This can result in buyers rapidly bidding in $10,000 or $20,000 increments. If you feel this happening, slow things down and bid in amounts you’re comfortable with – don’t be controlled.
Your homework – check out recent sale results in the suburb you’re visiting. Before you arrive you should know the market price of your target property and the median property price of the area. Don’t get caught out because you didn’t do your homework.
Try making a pre-auction offer – avoid the stress of auction day altogether by making an offer beforehand. Owners who are looking to sell at auction usually want a quick sale and may agree to an offer, to save money on marketing, promotion and other costs.