Over the past couple of weeks I’ve had four separate friends ask me for tips on how to bid at auction. I’m taking it as a sign. Here’s my list:
Have a plan
Settle on three numbers before the auction and write them down so you don’t get carried away in the heat of the moment.
- What’s the best and lowest price you think you could get the property for.
- What’s the realistic price of what you are willing and comfortable to pay.
- What’s your hard-stop-this-is-absolutely-my-final-offer price? If you’re buying as a couple, be honest and be aligned.
Stand where you will feel most comfortable
Right at the front, over to the side, under a tree – it’s your call.
Some say standing up front so you can watch the auctioneer and exude confidence is key; others prefer to be at the back to enable them to survey the scene and watch other bidders. I’ve seen some bidders stand next to the auctioneer and face the crowd. You do you.
Don’t be backward in coming forward
If you want the property, throw your hat in the ring and offer a clear and loud bid. Best case: there are no other bidders, the property passes in to you and the ball’s in your court to negotiate.
Call in the cavalry
If you don’t feel comfortable bidding, ask a reliable friend or family member or engage a buyer’s advocate.
If there is lots of bidding and it’s coming in thick and fast, ask the auctioneer where the bid is at. Often bidders will try to intimidate other bidders in an attempt to push them out – you can always ask the auctioneer for clarity.
Slowing down bidding can also help stop momentum from building and the auction running away.
If the property is passed in and you’re the highest bidder, you have the exclusive right to negotiate. One technique I’ve seen used successfully on multiple occasions is to tell the auctioneer you’ll only negotiate outside the house. The idea is, it allows you to retain power. You’ll be less emotional than if you were sitting on the sofa in your ‘dream house’ and ultimately, it’s much easier to walk away if negotiations stall.
Don’t get carried away
We’re in a buyer’s market – use that to your advantage.
Article source: Queensland Property Investor
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