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First Home Buyer Hub Buy at Auction Take it slow when bidding

Take it slow when bidding

When bidding, say the full number rather than the increase. For example, say ‘Four hundred and fifty-seven thousand dollars’ instead of waving your hand and saying ‘seven’ (i.e. indicating that you’re raising the current bid by $7,000).

When you say it, be confident and make sure everyone hears it. It reminds people how much they’re paying for the property and can turn off other bidders if they’re close to their budget.

buying-at-auction

Being prepared is half the battle when going to auction!

Try not to bid until the property is announced to be on the market, or until there has been a vendor (seller’s) bid moving the price closer to reserve. By doing this it might take a bit of momentum out of the auction.

If there are no genuine bids and it looks like the auctioneer will pass the property in, make sure you bid as it gives you the exclusive opportunity to negotiate with the vendor after the auction. At a minimum, put in a low-ball offer to secure this right.

Keep your price to yourself

Always set a budget and stick to it, and never tell the real estate agent.

buy at auctionFrom experience, slightly higher and uneven numbers can make really good budgets (and give you a competitive advantage!).

For example, say you think a property is worth $450,000—and a few other people, including your competition, could have also set this number as their budget. If you set your budget at $457,500 it could be enough to put you slightly ahead and win the property at auction!

Auctions are a pretty foreign experience for most of us and can be quite scary. If you’re emotionally connected with the property or not a confident bidder, get a friend or family member to bid for you. Even better, you can use the services of a reputable buyer’s agent to bid for you as they have plenty of experience (we can recommend a buyer’s agent if you need).

Property expert John McGrath recommends controlling the momentum of the auction to your advantage, saying, ‘Sometimes it’s advantageous to slow an auction down and ask the agent to accept smaller increased bids. Other times it’s better to make higher, more confident bids to “scare” other purchasers and kill any momentum. Only experience can tell you what to do here but the point is—there’s no hard and fast rule.’

Lastly, make sure you stand in a good position where the agent can see you clearly, and where you can spot all the other bidders in the crowd. Try as much as possible to look confident and relaxed (which is more often easier said than done)—and in the blink of an eye you’ll be hearing ‘going, going, sold’!

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