one tactic is to make a low bid to start the auction. at the outset, you don’t know how many interested parties there are (if any), and how much they’re prepared to bid. so, there’s no need to put in a high bid at the early stages. just place a low bid and see where the auction goes from there.
if you open the auction with a low bid, the auctioneer will note your interest. they’ll keep an eye on you so you’re less likely to be missed when the bidding heats up. once the bidding starts, just sit tight, size up the other bidders and watch how the auction unfolds.
unless the property looks like it is going to be passed in, don’t bid again until the reserve price has been met. when the home is announced to be “on the market’, the property is truly for sale. there are no more vendor bids and every bidder is playing for keeps.
one auction strategy which seems to have consistent success is to create the impression that you will continue to bid until you own the home, no matter what.
it’s about projecting confidence and psyching out the other bidders. more timid bidders are often put off by an aura of unstoppable self confidence and they will stop bidding.
you must create the impression that you don’t have a limit. you may be down to your last couple of bids, but it is vital that you maintain this pressure on the other buyers.
wait until near the end of the auction, when the bidding has slowed down and the other bidders are starting to lose steam. the auctioneer will start the “going once, going twice…routine”. come in with a clear and confident bid. if the other buyers make further bids, immediately and without hesitation, respond with a higher bid.
bid quickly and assertively. agonizing over every bid is a definite sign of weakness. if a buyer is looking worried and having hushed conversations with their partner every time they make a bid, that’s a clear sign to the other they’re near or over their limit. you don’t want to send this signal to other bidders, because they know if they keep going a little bit longer, they’ve got you!! So, you have to keep your cool, even if you’re only a few thousand from your limit. don’t hesitate on your bids. if the other buyers are dithering over their bids, you can knock the wind out of their sales by immediately responding with a higher bid. be prepared to bid confidently up to your limit and then walk away.
rather than nodding your head or raising your hand to agree to the auctioneers suggested bid, i recommend calling out the amount of the bid in full. this allows you to project confidence and determination with the tone of your voice. it also reinforces the full price being paid, rather than the increment which may be only $5000, $1000 or even $500.
when the bidding is down to small increments, it's easy for buyers to lose sight of the amount of the money being bid. calling out the full amount of your bid is a reality check for other buyers who maybe at or above their limit. a few extra $1000 bids may not seem like much. but if you call out “four hundred and seventy two thousand” your competition might suddenly realise they’re actually over their limit and stop bidding.
IF THE PROPERTY IS PASSED IN
if the property is passed in, it’s a big advantage to be the highest bidder. the highest bidder is usually given the first opportunity to negotiate to buy the property. in my experience, well over 80% of passed in properties sell to the highest bidder. so you want to put yourself in the box seat to negotiate with the vendor.
the bidding strategy is essentially the same as above. however, you need to pay close attention to vendor bidding. if you’re the only interested buyer, you don’t want to bid the price up against the vendor, because essentially you bidding against yourself. but if there are other interested parties, you want to maneuver yourself into the position of highest bidder.
however, if you are not the highest bidder, but you’re still interested in the property, you should definitely let the agent know. you’re still in with a chance to buy the property if negotiations break down with the highest bidder, or if you’re prepared to pay more than they are.
STICK TO YOUR WALK AWAY PRICE
the rapid pace of auction leaves you little time to make decisions on the fly. with a private treaty sale, you have the opportunity to rethink your position on price with every counter offer. you can talk your offer over with your partner, redo your sums and, literally, sleep on it.
at an auction, you don’t have this luxury. you may well be put in the position where you have to make a snap decision about something that can have long term repercussions for your life. do you go $10,000 over the limit you’ve set in your head, or risk missing out on a home that could bring you much happiness and security for years to come?
rather than putting yourself in a position where you have to make these decisions on the spot, it’s advisable to think through all the angles before auction day. know your walk away price – you have to go into an auction knowing at what figure you will absolutely not make another bid.
GOOD LUCK ON THE DAY!!!