Competing to buy a property at auction can be nerve-wracking. Your performance is there for everyone to judge, and you can see all the other people gathered who are trying to win the property, too. It can get intense.
Of course, this tension creates an environment where the property will find its market value and ultimately, that’s good for both the buyer and the seller.
If your dream home is being sold by auction, here are six tips to help you win the day.
Do your research
Don’t attend an auction with no idea of the property’s value. That’s like flying blind. Your due diligence should include checking local prices of similar properties, the average time a home stays on the market before it’s bought and discussing the market’s mood with agents.
Remember to register
You have to register for an auction, so arrive with plenty of time to spare. Maybe you can grab a quick chat with the agent or auctioneer and see if you can get a sense of their expectations of the day.
Pay attention
Focus on the auctioneer. If you want to bid, raise your hand or the card with your registration number. Don’t wait until after the gavel has gone down – by then its far too late.
Body language
If you find yourself in a bidding war, read the body language of other bidders. You’ll know they’re approaching their budget limit when they start looking and talking to their partner or seek to bid in smaller increments of say $1000.
Small bids
Watch for smaller bids. They can push the price higher than anyone expected if the contest becomes protracted. You can try to prevent this by placing a decent-sized bid that’s too hot for the others and blow them out of the park.
Only bidder
What happens if you’re the only one who puts up their hand or everyone is being coy? The auctioneer might place the vendor bid (the owner’s minimum price). Some people will refuse to respond, believing they’re being coerced into bidding against themselves. But if you are the highest bidder when the property is passed in, you’ll be invited in to negotiate and this is often when a deal can be done.