Many property investors are intimidated by the bidding process at an auction. If you sit back in fear of properties going to auction and avoid these properties, you are going to miss out on a lot of good buying opportunities. The best properties are usually offered for sale by auction.
It is understandable that auctions bring with them heightened emotions and excitement. The major concern is that you might pay more than you intended to in the ‘spur-of-the-moment’ thrill. The lead up to the auction can also be a nervous time for some. There is the consideration of what the vendor will accept as a purchase price, the thought of whether you are being enticed to go along on the day based on underquoting and also, how much competition there will be. Let’s not forget the feeling of falling in love with a property, only to be outbid by someone who has the ability and is willing to pay more for it!
Auctions can have their perks however. You are able to be physically present, which means that you can see ‘the competition’, read their body language and observe who else is interested in the property. People will always give signs that they are close to their limit, so remain vigilant and use these signs and observations to your advantage.
- Make sure you have done your research and you have your finance in order.
- Check the contract and the prices quoted and determine the maximum purchase price that you can and will bid to. This will make it easier come auction day, to stick to your intended plan.
- Portray confidence and make other bidders believe that you have deep pockets and no limit. If you procrastinate or agonise over your next bid, you risk showing signs of shaky confidence.
- Open the bidding high or close to the reserve price and make sure your bids are fast and assertive.
- Always call out your offers in full to avoid any confusion. I am sure we have all been at an auction where the auctioneer will call out the increase in increments, only for someone (or yourself) to be confused.
- If the property looks as if it is going to be ‘passed in’, make sure you are the highest bidder as this will allow you the first right to negotiate with the vendor.
- Be prepared to miss out and stick to your intended ‘walk away’ price and plan. Just remember, it is far better to walk away from a property than to over-commit yourself.
Good luck and remember, stick to your plan!
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