So the million dollar question, how do you bid successfully at auction? A lot of people tell you there is no trick to it, that it’s all about he or she or whoever has the deepest pockets and they’re going to be the ones who are successful in the day.
Financial resources is obviously a huge factor but there are a few tricks you can use on the day:
1. Laws of the Jungle Apply
At an auction you have the the ‘animal spirits of capitalism’ at their most pure and I can tell you the laws of the jungle absolutely apply.
What do I mean by that? Well, it is absolutely possible to intimidate other buyers at the auction to make them hesitate, to make them think twice about putting that next bid in.
2. How do you do it?
In short: you intimidate everyone when you make your first bid. I’ll tell you in a moment about when I think you should make your first bid but, when you do it, put that paddle up, confidently, assertively and very calmly, kind of like James Bond in the movie.
3. Body language is extremely important.
Not just your body language but observing the body language of others in the auction, so for that reason, two other quick tips: (1) wear sunglasses and (2) sit at the back of the aution room so you can observe others.
4. Bid Fatigue is a Thing
Bid fatigue is absolutely a thing. What is bid fatigue? Well, let me give you an example, you’ve got two buyers at an auction and it seems like it is a two-horse race. They’re going bid for bid for bid, dollar for dollar. They’re going at it hammer and tongs. The increments are getting smaller and smaller until, finally, the auctioneer is just about to put his gavel down for the third time, and then, all of a sudden out of the blue, a fresh buyer comes in and blows everyone out of the way .When this happens, you can literally see not only the people in the race but everyone else who thought they may have been with a shot, you can see them just become absolute deflated.
So, for that reason, my number one advise to you is (budget dependent) your first bid should really be when the gavel is going to go down for the third time.
5. Preparation is Key
As with most things in life, preparation is key. If you’re going to bid confidently at the auction you need to be confident. And the best way to be confident is to be totally prepared. Make sure you’ve done all your due diligence on the property. Make sure you’ve done a pest and building inspection. Make sure your solicitor has been through the contract and reviewed it for any nasties. Absolutely make sure your finance is pre- approved.
A couple of other quick things, you need to make sure you bring a deposit check to the auction. How much? Well, it needs to be 10% of the purchase price. Now, that’s difficult to ascertain before the auction’s finalized. But, I normally say bring 10% of the maximum that you’re willing to bid. If you end up getting less than that, you can normally get a refund on Monday.
The other thing you need to make sure you do is bring along any amendments that your solicitor has negotiated for you. They will rarely be incorporated in the final version of the contract of the auctioneer has, SO you’re going to have to show the agreed amendments letter to the auctioneer after the auction and he/she can make those amendments by hand. If it’s all too difficult for the auctioneer (and sometimes it is) don’t stress, your solicitors going to be able to sort out on Monday.
So, in summary be confident, don’t bid to early or too often and preparation is key.
If you have any questions about this article, please contact the office on 1800 870 407 and one of our solicitors/conveyancers will be able to assist.