08 Nov Property Auction Strategies: 10 Tips for Securing Your Dream Home
Property auctions are high adrenalin and certainly competitive events. While they can be nerve-wracking, they can also be rewarding if you are the successful purchaser. Where possible as Buyers’ Agents we prefer to purchase a property prior to auction because it can provide several advantages; including more control over the process, potentially securing the property at a lower price and avoiding the competitive and sometimes unpredictable nature of auctions. However, there are circumstances where a property must go to auction and you will require a well-thought-out strategy if you need to go to auction.
10 Auction Strategies To Help You On Auction Day
1. Research and Preparation
Before bidding at auction, research the property thoroughly. Understand its value, recent sales in the area, and any unique features or issues. Set a clear budget and decide on your maximum bid. Stick to this limit, and don’t let emotions dictate your spending. This allows you to bid confidently up to your maximum. And try to stay calm and composed as this will allow you to keep your emotions in check and stick to your budget.
2. Attend Auctions as a Spectator
If you’re new to the auction process, consider attending a few auctions as a spectator. This will give you a feel for the atmosphere, bidding dynamics, and strategies used by experienced buyers.
3. Register Early or Pre-Register
Real estate agents often prefer to pre-register buyers in the days leading up to the auction as this lets them know how many buyers they will have attending. If you don’t pre-register, ensure that on the day of the auction, you arrive early and register as a bidder. Ensure you have all necessary identification and financial documents ready. Registration is a critical as otherwise you will not be able to participate.
4. Positioning & Observation
Choose your position carefully. Standing at the front or centre of the crowd makes you more visible to both the auctioneer and other bidders. It’s also important to view your competition. Keep an eye on other bidders’ body language and signals to gauge their interest and strategy. At the same time be aware of your own body language as other bidders will be doing the same to you.
5. Confident Bidding
When you’re ready to bid, do so confidently. Use clear signals to make your intentions known to the auctioneer. Avoid hesitating or appearing uncertain, as this signals to other bidders that you might be reaching your maximum. Even if you’re down to your last dollar, you want to appear confident and that you can continue bidding. Often starting with a strong bid will knock out uncertain bidders who are intimidated by your opening offer.
6. Set Your Bid Strategy
Decide whether you want to open the bidding or wait for others to bid first.
As buyers agents, our strategy depends upon the situation — i.e. number of registered bidders, realistic price guide etc. If not-one wants to start the bidding, rather than milling around we often start the bidding with a strong first bid and control the auction. This knocks out smaller repetitive bidders. If someone else starts the bidding, we often sit back and wait until the property meets the reserve and is officially “on the market” before we join the bidding. This is where local market knowledge is imperative.
7. Bidding Increments
Be aware of the bidding increments, as these are typically set by the auctioneer. The auctioneer will prefer you to bid in larger increments as the price moves up quicker, however once the property reaches a certain price you can offer smaller bids to slow the bidding. Using your own bidding increments is a way of controlling the auction process and knowing when to do this will come down to experience.
8. Understanding The Auction Rules & Process
Understanding the auction process is key if you want to successfully purchase the property as there are many different scenarios that may unfold. For example, understanding what happens if a property gets passed in at auction and who has the first right of negotiation in this situation. In this instance, the highest bidder has the first right to negotiate to purchase the property. When the auctioneer pauses to allow bidders to consider their options use these moments to catch your breath, reassess your strategy, and check your budget.
9. Set A “Walk-Away” Price
Before the auction, determine a “walk-away” price – the point at which you’ll stop bidding, no matter what. This ensures that you don’t overextend yourself in the heat of the moment. Make your walk-away price an odd number. For example, some people might cap their budget at $1,000,000 however, if you set your maximum at $1,007,000 it might mean the difference between securing the property and being unsuccessful.
10. Professional Advice & Expert Help
If you’re unsure about bidding at auction, consider seeking the services of a professional Buyers Agent. Buyers’ Agents regularly bid at auctions and have established and proven auction bidding strategies. An independent Buyers Agent works for you and not the vendor so they have your interests at the forefront of any strategy. Experienced Buyer Agents possess the expertise to gauge the opportune moments to bid, determine the right amount to offer, and adeptly navigate the complexities of auctions. Their expertise ensures that you secure your property at a fair price, whilst giving you the confidence that you have made the right purchase decision.
Successfully securing a property at auction requires careful planning, research, and a well-executed strategy. By following these auction strategies and remaining disciplined in your approach, you can improve your chances of winning your dream property while staying within your budget. Remember that practice and experience will also help refine your auction skills over time. At Premier Home Finders we are experts in negotiation and auction strategies, with over 30 years of experience buying Sydney property. For a confidential discussion, contact us to find out how we can help you secure your next property.
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