As an auctioneer I’m often asked “should I have a strategy when I am bidding?” I’m not sure that there is a sure way of ensuring success at auction but a colleague of mine sent me some useful tips for bidders. Below is an extract from an article that was written by Justin Nickerson who currently is the Australasion Auctioneer Champion. Justin operates out of Queensland.. Get Rid of the Nerves!
The first strategy to win on auction day is to not let your nerves get the better of you.
You will be nervous, of course, but too many bidders try to manage their nerves by sitting back and waiting to bid.
But by doing that you actually increase your nervousness.
The secret to successfully bidding at auction is the person who is under the least amount of pressure is always the person holding the bid.
The more you don’t bid, the more nervous you become, and the more pressure you’re putting on yourself.
As soon as you bid, you’re holding the bid, and all of that pressure is off you and on everyone else.
Remember, your job on the day is not to beat the agent, the auctioneer or the seller; it’s to beat the other bidders – and you do that by giving confidence to yourself and taking it away from the competition.
So bid early and if you get in a bidding war, the best strategy is to bid quickly.
You don’t have to bid large amounts, but by bidding quickly you look like you don’t know where you’re going to stop and you’re forcing the other bidder to make a decision.
So you’re handing that pressure over to them every single time.
While they’re discussing what they’re going to do, you have your strategy ready to bid again straight away. Knock-out bids don’t work
One of the biggest mistakes I see is bidders trying to knock-out the competition with one solitary bid.
Waiting until the property is on the market and thinking you’re going to knock out everyone else with a single bid just doesn’t work.
The problem with this “strategy” is that you’ve let the other bidders get confident and auctions are all about confidence after all.
Those active bidders are feeling confident and comfortable, but you are not.
If you’re new to bidding at auctions, you don’t want your first-ever bid to be when the property is on the market and it’s playing for keeps.
You should also place your bids early and catch the auctioneer’s eye – that way when it gets to the pointy end you’re feeling quite relaxed. Understand the process
With more and more borderless investing, it’s imperative that you also understand the relevant auction legislation because each State and Territory has different laws.
You should also try to attend auctions so you can feel more comfortable with the process.
It stuns me that some people bid at their very first auction, with little knowledge about the process or even how to bid, but they’re about to make a financial decision that may last for 30 or 40 years.
You can remedy this by watching other auctions, including auctions by that property’s auctioneer, so you can learn how they operate and you can take care of as many of the unknowns as possible. Then you can simply focus on securing the property.
We quite often get enquiries from people who will be bidding at one of our auctions who want to attend some of our auctions before the big day. Be interested
Another secret to auction success is you must show your interest in the property beforehand.
One of the main misconceptions is that buyers feel they have to withhold information from the agent or the auctioneer, but that is always a mistake.
The reality is, if you can form a good relationship with the agent, they’re the best ally you can have to buy the property.
They can give you the most information and guide you through the process.
You don’t want to tell them everything but you don’t want to mislead them either.
Don’t tell them you’re not interested if you are because we’ve had situations where people have tried to play their cards too close to their chest and have missed out because the property was sold prior to auction.
If you tell the agent of your intentions – it doesn’t have to be your budget – most agents will try to look after you before and during the auction.
Another strategy if the property has been passed in or you’re in a position where you can’t bid, you should attend the auction anyway because the sellers are usually very open to negotiation.
An agent will always give first preference to the people at the auction on the day – and it’s usually the person who strikes the quickest after the auction that is the victor.
Ever wondered what your home is worth?
It is always good to keep your finger on the pulse, we might have a buyer that is just right for your home. If you would like one of our team to contact you to arrange an up to date market opinion of the value of your property please contact us.