If you have dreams of winning an auction and being that person who throws their arms in the air in delight, you’re in luck. Auctions are the preferred method for home sellers in a hot trending market, for the simple reason that at an auction people can sometimes work themselves into a frenzy.
Overall, private sales are the usual method of property transfer, as it allows both buyers and vendors to weigh up offers and carefully evaluate what’s on the table. In some places, especially across New South Wales, auction hot spots flare up as neighbours hear just how emotional bidding can get. In the frantic race for the prize, figures can go up significantly. Those who missed out at a previous auction become all the more determined at the next.
If you are genuinely interested in a property that is going to auction, have some idea of what to expect. It can be a tense and overwhelming environment and there are plenty of tricks and traps to look out for. These tips for winning an auction will help you out smart your competitors.
You can’t be juggling a balance book or whispering into your telephone while bidding. You need to know in advance what your spending allowance is. The worst possible outcome isn’t that you miss out on the home, it’s that you overpay and commit outside your budget limit. Know the market value and map out the flexibility you have around that. When you know your limits, you can bid with confidence.
Be careful not to cut it too close to the bone, you still have living expenses, upfront costs and bills to pay. If you dedicate all your income to loan repayments, you may not get to enjoy that house very much.
Spend some time playing with an online loan calculator and see how different price outcomes will impact your repayments, fees, and insurance.
Make sure you give the property a thorough going over. If possible have the bank confirm the value of the property as part of your loan approval. You will have access to the sales contract well before the auction so make an appointment to see me and get familiar with all the terms. Speak up if there are any changes you want to make so you know where you stand well before you commit. If you are not happy with their response, it’s good to know that before the hammer comes down.
Typical items to keep an eye out for are the settlement period, repairs, renovations and modifications, and council compliance (or lack of). If you are going to be investing, it needs to be an investment on the property you want. Often potential bidders feel that these terms are waved at auction and you take it as it comes. Luckily this is not the case and you have time before the sale day to detail your expectations.
Leave Emotions at Home
If this is the first time you have bid you will understandably be nervous. Don’t let that show and certainly don’t let your emotions do the bidding for you. Pick a front and centre position and stand in clear view of other bidders and the auctioneer. You mean business. Confidence sends an incredible message of power and authority.
When you position yourself in a way where the auctioneer is looking to you with every bid you establish a feeling that this is your call. You are the deciding factor here, to the point where the auctioneer almost appears to be asking your permission. In this position, with this control, you hold the room at your bidding.
Make the First Move
How do you make yourself stand out at an auction?
It’s great that you look like you know what you are doing, now prove that you are up to the task by making a strong opening bid. Because you know the property’s value (you may even have asked about a good opening bid in your research) you can strike first. Statistics show that the people who bid first win at auction more than anyone else.
Don’t go too fast though, an auctioneer may actually reject your bid if they feel you are moving too quickly. You want to pose a threat without actually harming anyone.
PRACTICE MAKES PERFECT FOR WINNING AN AUCTION
To help keep your head through this daunting process go to as many auctions as possible before your own, regardless what property is selling. Forget about the sale and watch the crowd. Pay attention to who leads, who wins, and what is happening so you gain confidence and familiarity in an environment that does not come with any pressure. That way, when it comes to one you care about, you understand what’s happening around you, leaving you free to focus on what you are doing.
An auction isn’t a disadvantage, it’s just a different format. You know what you are buying, you know who is interested and you know what other people are willing to spend. Compared to a private sale you have a lot more information which gives you an opportunity to get ahead.
If your first efforts don’t work in your favour there are plenty of other opportunities, new homes on the market constantly and more experience to gain so you can move forward with confidence and skill.
Winning an auction is exciting, if you would like help with the process, please contact our office to schedule an appointment.
Seeking my advice on the Contract prior to the auction day is a critical step in your success, please contact me before you go to auction so you know you’re in safe hands.