Devising an AUCTION STRATEGY
TACKLE AUCTIONS LIKE A PRO
To begin, search your local auction market results. This may appear obvious, but every area across Australia has its own market attitude towards auction sales. Big city areas love them, quiet country towns may not! Review the weekly percentage sale results, that way you can ascertain the chances a home will sell under the hammer.
CHECK OUT THE COMPETITION
Play detective. Attend every open house, or get friends to. Ask the agent about levels of interest – obviously they will always imply it’s positive, but keep asking them and their colleagues, see if their stories match, and ask your friends to ask as well. Analyse and listen to other people around you – are they serious, or perhaps just nosy neighbours. Always ask the agent direct questions that require factual responses, such as how many contracts have been requested, or have they received any pre-auction offers? Understanding the level of potential interest before auction day helps you prepare for battle. Sadly, there can be many contradictions. You think the home has considerable interest, but no-one bids. Conversely, you think interest is low, but a serious buyer appears on the day, determined to win.
HOW MUCH IS THE HOME WORTH TO YOU?
Every property has an approximate market value. If the seller is motivated and interest is low, that figure could be less. With multiple buyers, that figure can soar. Ascertain a market value and consider if the home is worth more than that to you. Decide on a maximum figure that you will not exceed, unless it is literally by a few
dollars.
DEVISE YOUR STRATEGY
You now know the local auction market, have an idea of buyer
interest and have a maximum figure in mind. My advice is not to have a hard and fast bidding rule, as until the auction sets off you’ve no idea how the parties will play. A guide is to sit back and let the auctioneer do all the work – do not let the agents push you and if they do, ask them to leave you alone. Stay in control and observe. How and when you bid can only be decided at the time. No bids at all, maybe try a very low figure? Strong bidding, offer as a new bidder, but only a very small multiple higher. My tip is adapt to the situation. With a hot property you may need to sit back and suddenly bid high, or wait until it’s virtually all over and bid just above. Only you can decide on the day. Bidding at auction is a game. Be prepared and expect to have to play hard if it is the home for you.