How to Successfully Bid at Auction
Well, I thought I would try something a little different this time with new post.
I am sure you have been bombarded over the years with articles about how to bid at Auction.
Today, I ‘m recommending a few simple tips you can implement and then show you how it plays out at a LIVE Auction!
This could go one of two ways!
In this video I am bidding for one of our overseas clients on an amazing property in one of Melbourne’s blue chip suburbs. The suburb where this property was situated in was “Caulfield South”.
The property was a brand new 4 bedroom double-storey townhouse and there was a decent crowd looking on.
So, we had to bring our A game, which brings me to my first tip!
HOW TO SUCCESSFULLY BID AT AUCTION
Tip 1 — Bring you’re “A” game
Look like you are there for business – dress for success.
Most purchasers at the Auction are casually dressed but it’s important to take it up a level.
I had previously met the Selling Agent as part of my Buyer’s Agent service. When I first met the Auctioneer on the day he instantly said, “Hi you must be the Buyer’s Agent”. I responded confidently with “yes I am, I’m here today to buy this property for my client.”
I always make a point of meeting the other agency staff and importantly I always take the time to introduce myself to the Auctioneer and have a quick chat. I do this in front of the auction crowd.
Body Language and image play a big part at any Auction and even the slightest edge will put you in a strong position.
It’s like a good bluff in poker!
Tip 2 — A quick, strong opening bid
I don’t understand why Auctions take a while to get going sometimes; after all they all want to buy right? As a popular property in a great location, it was never going to sell for a bargain!
I didn’t make an opening bid at this point at the auction as I really wanted to see how many and who were my direct competitors at this auction. The selling agent had previously been quoting an estimated selling range of between $1.8M to $2M to prospective buyers. I knew this property was worth considerably higher than this figure.
So the bidding started at $1,800,000 which was where I expected the bidding would start. As a lot of inexperienced bargain hunters who don’t really quite understand how the quoting selling works always seem to be the one’s who bid in the selling range where the selling agents are trying to ‘woo’ the buyers. Anyway, at this stage I’m remaining quite calm and just monitoring the bidding at the auction.
There were 2 other people bidding for this property, including the person right next to me who was the highest bidder at $1,975,000. I then decided that now was the perfect time to enter the auction bidding as the bidding increments went from $50,000 to $25,000 which is often a good sign that the other buyers are approaching their limit. So I confidently called out a bid of $2 million dollars so just about everyone in the auction crowd heard it. And did they hear it. They most certainly did hear it!
However, a competing buyer has different ideas and decides to place a counter offer of $2.25M. It was at this point I needed to send a clear message to these bargain hunters and emotional buyers that I’m here today to purchase this property and nothing was going to stand in my way!
I went up by $75,000 on a bid at $2.1M. I did this to show everyone at this auction that I was here not as a spectator, but I was here to do business today and ‘WIN’!
There were no further bids at this point so the Auctioneer declared he will refer this bid to his seller referred to his sellers. The common ‘Australian slang’ term is known as the ‘auction half-time break’.
For those few brief minutes whilst waiting for the Auctioneer, I felt extremely self-assured that the auction bidding strategy was working well. In fact, it had worked so well that I had managed to knock out 90% of the competition and it was down to just a couple of other bidders and myself.
Tip 3 — Avoid a bidding war
Shortly after, the property was then on the market on my bid and that’s where it started to really heat up!
Avoid bidding in increments of $1,000 if you can, even towards the end.
As you see in this video, our bidding increments were much higher than the other bidders we were directly competing against. Additionally, some of our bids were at different increments. Typically, at other auctions we intentionally vary the bidding increments to keep the other buyers guessing on what we will do next – it’s a bit like playing a game of ‘poker’.
So, I went up in considerably higher bids and more importantly, showed no signs of weakness or indifference.
Bids must be instantaneous and strong. There should be no sign of slowing down. And never give any negotiation opponent an inch and always keep them guessing about what your next step is…
Of course, our client did not have an endless budget, but that is the impression you want to give, whether you are $20,000 from maxing out or just $2,000.
In the end the $10,000 increment was the final straw to our opponents to outbid with their $1,000 increments and we got the result that we were after.
SUMMARY
There are some little things you can do that make a big difference when you are bidding at Auction.
- Dress to impress and for success – stand out!
- Look like a professional: talk to the selling agents and Auctioneer, it will send a strong a message that you are not just another number in the crowd.
- Once the Auction is underway a strong opening bid can set other bidders back and knock out the competition. But you do need to be careful deploying this particular strategy as really depends on your due diligence and how confident you are researching and analysing the sales data.
- You are now in control and have other potential buyers on the back foot.
- This will also take some of the bargain hunters and emotional buyers out of play.
- Avoid a bidding war by increasing your increments at a higher rate.
- $5,000 or $10,000 bids are harder; take more thought and hesitation than $1,000 increments.
So let’s see how it played out
Our client was an overseas buyer and by using our services he ended up saving over $300,000 on his chosen property.
Head over to our website to learn more about how we can help you whether it’s our Buyer’s Agent Service, Auction Bidding Service, Commercial Property Service or Vendor Advocacy Service.
Or Email: Zac Newbold zac.newbold@youraustralianproperty.com.au
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