What does a highly successful real estate agent suggest you do when bidding at auction?
Auction days can be stressful for both buyers and sellers. If you’ve never been to or bid at an auction before, then that can be especially true. It can be even more stressful if your property doesn’t reach the reserve price, but a good agent can ensure this situation doesn’t have to spell disaster for vendors.
Before you even get to the auction, it is imperative that you’ve done all your due diligence; you’ve had your strata or building inspections done, you’ve had your conveyancer or solicitor look over the contract, and you’ve got your finance in order — don’t forget to tell your lender that you’re attending an auction.
You should also have done enough of your own research to have determined an approximate market value for the property you’re bidding on. Study the market thoroughly, consider what other similar properties have sold for, and, if you can, attend some auctions of other properties in the area to gauge the buyer sentiment.
On the day
Get there early, so you can inspect the property one last time before the auction, and then register for the auction. Take note of the number of other people that register for the auction too — not everyone who turns up to an auction are necessarily there to bid; many are just there doing their own research for another property or to gauge how much they could potentially sell their home for.
When the auction starts, make sure to get yourself a position near the front, where you can see the auctioneer and still see what the other bidders are up to. By paying close attention to the other bidders, you’ll be able to tell pretty quickly when they’re reaching their bidding limits; once you see that they’re going to bow out, it’s your turn to go hard.
Top bidding tips — from a professional
We asked experienced Sydney real estate agent, Derek Farmer, who has vast experience in property auctions (as auction is one of the most popular methods for selling homes in Sydney’s lower north shore) what his top tips are for vendors bidding at auction. Here is what he has learned — direct from real life experience:
- Know your upper bidding limit, and never deviate from it.
- Make sure you understand auction terminology — opening bids vs. vendor bids vs. reserve prices, etc.
- If you’re having a friend or other third party bid on your behalf, be sure to sign a statutory declaration to that effect at registration time.
- If there are only one or two other bidders there, hold off making the opening bid.
- When there are several or more other registered bidders, don’t be afraid to open the bidding with a confident bid that shows them you’re serious.
- Try to avoid being the the last minute, mysterious bidder. This can backfire if the auctioneer closes the sale before you get the chance to make a last minute bid.
- Bid confidently!
Remember that buying a new home should be an exciting time, even though aspects of it can be stressful. Derek emphasises that people should go by their instincts: “If something tells you that this is the home for you, go for it and do your best to have the winning bid. If, by contrast, you feel that it might be better to let this one go, then do it; it’s never a good idea to exceed your budget.”
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