Bidding at auction like a pro
Too often we hear stories of phenomenal wins and losses via an auctioned property. Invariably, novice bidders get caught up in what I call the “must win”syndrome and end up paying way too much for a property.
Blogger: Victor Kumar, Right Property Group
An easy way to gauge the psyche of this way of buying properties is to listen to what the agents are saying to prospective buyers : “another $1000 and you will WIN this property”or “you don’t want to LOSE OUT on this great property just for a few hundred dollars...”
But at the same time, done the right way, buying at auction can be a very lucrative business, so long as you stick to the basics.
The fact that many buyers are intimated and don’t like the pressure and public spotlight of the auction process means that if you keep your wits about you and go at this in a structured manner, you can indeed “win”...and win on your terms , not the agents.
So what are the basics?
1. Decide on a limit, and stick to it. There are many ways of doing this, but there is a pricepoint beyond which you should withdraw from the bidding, and not be bullied or cajoled by the auctioneer or agents (sometimes called the crowd workers) into putting in that "one last bid"
2. Know your auctioneer, ie go to a few of the other auctions he or she is conducting so that you are familiar on how they run the auction, eg is it a quick going once, twice three times: sold, or is it a drawn out process where they talk about the weather in between the going once etc
3. Is the auctioneer likely to start with accepting a low bid, or does he ignore them....in that event I always STILL TRY a low bid, just to test the waters.
4. Know your competition, if you are bidding against someone who is hell-bent on getting the property no matter what, it may be wise to retreat strategically
5. Just because the auctioneer says he will take bids of 10k, doesn’t mean you cant throw in a 2k bid....there are only two outcomes, he will either accept or not accept your bid
6. And the humdinger: ALWAYS sort out the means to pay your deposit beforehand, so that in the event you are successful, you are able to make payment of the full deposit then and there, as I have seen many times properties that go for a song at auction lost by the winning bidder because they are unable to pay the deposit within reasonable time.
