Strategies for buying at public auction
31 August 2016
Many buyers, especially those new to the buying process, feel a certain reluctance to bid on a property that is up for sale by Public Auction. Those that don’t overcome their nervousness probably miss out on some desirable properties and some good buys - and in many areas the majority of property is sold this way, which means buyers end up with little choice about taking the plunge and making a bid. But there are ways for buyers to feel more confident when they enter the auction room.
To start with, it’s important to get some experience by going to a few auctions and watching what happens. Stand in different positions and determine where you can best be seen by the auctioneer and at the same time you can see other bidders. Work out who you might be bidding against if you were actually buying, and observe their body language. Couples especially express a lot of emotion in their stance, exchanged looks and other body language. It is possible to ascertain when people are reaching their limit by the increase in their anxiety levels. By the same token, when you go to an auction that you intend to bid on, be careful not to give your own feelings away.
Naturally those who have researched property values thoroughly are likely to feel the most confident when bidding time comes. Set an upper price limit before you go in; having a range makes it easier, with your ideal price at the bottom and your limit at the top. You can even practice bidding by putting in opening bids or low bids on properties that you know will go much higher. (Don’t end up being left holding the baby though if there aren’t many bidders in the room!)
If you’re really keen on a property (especially if you are an existing tenant or could in some other way be known to the agent or vendor as someone with a special interest and likely to pay top dollar) take the heat off by getting someone to bid for you. You can use a friend or engage the services of an appropriately qualified and professional agent (not someone working for the agent who is selling the property of course!) with whom you have a good rapport.
While auction is often accepted as the way for vendors to achieve the highest price, buyers can often make good buys when there are forced sales, especially in a buyers’ market when there are fewer buyers than properties for sale. Buyers who spend the time familiarising themselves with the auction process are better able to read the mood on the day and know when to bid and when to leave well alone.