How to handle auctions.

With such high clearance rates at the moment (reported to have been over 70% for three months running), more vendors will be choosing to auction their homes rather than offer them for sale at a price. And competition can be fierce when there is little quality stock out there as well as first home buyers in a rush to buy before the end of September.

We speak to so many buyers about auctions – most hate them – and there are a myriad of opinions on how to best handle them. When bidding for our clients we take into account many variables including who the auctioneer is, who the selling agent is and how clever they are at auction negotiations, how busy the inspections were and what the vibe was, information gleaned from the selling agent about vendor motivations, likely competition levels and, of course, what the property is worth. Here are just a few of our ideas – remember that every auction is different and one technique will not be useful in all scenarios.

Have a clear idea what your budget is and what the property is worth to you. This is the golden rule. Do not deviate from this and you should not get drawn into a bidding war that will result in you overpaying.

Try being the first bidder. This goes against conventional wisdom, which is not to bid until the property is called “on the market”. You have a better chance of controlling the auction if you start it with a strategic bid. But that is the key – this opportunity must not be wasted.

Don’t wait until the property is called “’on the market” to bid. How is it ever going to reach reserve unless people bid?? Seriously, we have seen plenty of properties sell under the reserve at auction after a bit of frantic negotiation between agent and vendor. And not all auctioneers will call the property “’on the market”, so you need to be careful here.

Stare down your opposition. A confident stance can do wonders in out-psyching other bidders and making them think you have bottomless pockets. We see many would-be buyers stop bidding prematurely because they believe the other bidders will stop at nothing.

The highest bidders right to exclusive post-auction negotiation is only a courtesy. The agents and vendors are able to negotiate with any interested party once the property has passed in. They will usually offer the highest bidder the first right of refusal, however there may be other parties suddenly making offers. By leaving the negotiations until after the property has passed in often vendors harden their stance and a good buying opportunity could have passed you by.

For more information check out our website: www.gooddeeds.com.au