20 Tips and Tricks To Crush The Competition At Auction
Ever wondered how professional bidders manage to win at auction time and time again?
If you’ve attended a property auction you’ll know that they are emotionally charged, governed by strict rules and everyone is playing for keeps.
Whilst there can never be a guarantee of winning at auction there is plenty you can do, both in the lead to and on the day itself, to improve your chances of success.
Unicorn Buyer’s Agents know a thing or two about auctions, learned and earned from attending more auctions than we can remember. Here’s the list of our top tips to help improve your odds of winning.
Before Auction Day
01. Research and Preparation are A Must To Win.
Your research will begin the moment you decide that property is right for you and will help you determine the likely price required to win the auction and decide whether it is a price you are prepared to pay. Be committed to do your research.
02. Calculate Comparable Market Value.
Make a list of properties sold in the past twelve that are similar in features, most importantly in land size, suburb and street location, orientation, number of bedrooms, and condition of the dwelling. Be aware of underquoting and use your own research to work out the price and comparable market value rather than relying on the guided price given.
03. Assess Supply and Demand.
Use RPData, or even realestate.com.au to tally how many comparable properties have recently sold, and how many days they spent on market (DOM) before selling. Also, when you inspect similar properties currently for sale, take note of how many other parties are inspecting and ask the agent how many contracts have been issued.
04. Be Aware of ‘Best and Highest Use’.
Best and Highest Use in real estate terms means what improvements can be made to realise the maximum value of the land. An improvement could be as simple as converting an unused attic or as complex as redeveloping a larger land parcel into a small apartment block.
Best Highest Use use will dictate what others are prepared to bid for the property and should inform your price too.
05. Assess Market Momentum and Buyer Sentiment.
Knowing whether a market is rising, falling or stable, and how quickly, is important. You’ll need to factor momentum into your winning bid calculations.
Some suburbs can experience price growth of twenty percent in one year with the majority of gains occurring in just a few months. This can see a marked difference in property values over the few short months your property search occurs. Be prepared to factor in 5-20% price variance above or below the anticipated target price.
06. Consider Everything That Will Affect Your Purchase.
Check nearby development applications. Read through council meeting minutes. Look at flood maps. A walk through the neighborhood talking to shopkeepers and neighbours is always useful too. The more information you have the more comfortable you’ll be with your bidding.
07. Make a Pre Auction Offer.
The best way to win your property is to secure it before auction day. Placing a pre-auction offer, leaving some negotiating room between your final price could tempt a nervous seller and put you in a position to negotiate without much other competition.
08. Attend Other Auctions In The Area.
Being ‘at the source’ is the best to take the temperature of the local property market. Plus you’ll learn to be comfortable under auction conditions.
09. Confirm Your Lending Capacity.
Let your broker know you are intending to bid and what you would like to bid to. Have them double-check and confirm your borrowing capacity even if your purchase bank valuation comes in lower than the purchase price.
10. Organise Your Deposit In Advance.
Moving large amounts of money, especially from overseas or specialty accounts can take longer than a regular transaction. Give yourself time to attend to this and don’t leave it until the day before.
On Auction Day
01. Arrive Ten Minutes early.
Auctions nearly always begin on time. Ten minutes is early enough to register and receive your bidding card so that you don’t feel rushed but not too early that you have time for nerves.
02. Choose Your Bidding Spot With Care.
Make yourself visible to the auctioneer and crowd and create a ‘stage’ for your performance.
03. Look The Part.
You are there to win so dress, and carry yourself accordingly.
04. Bid Confidently.
Use a clear voice. Call every bid in full rather than just nodding or agreeing with the auctioneer. Choose your bidding increments deliberately and don’t feel you need to stick to round numbers or accept the auctioneers proposed bid.
05. If an Auctioneer Refuses Your Bid.
No need to feel flustered. Take a breath then resume bidding when you’re ready.
06. Don’t argue with or heckle the auctioneer.
It’s bad manners and won’t do you any favours, in fact probably the opposite.
07. Have a few Bidding Strategies Rehearsed.
Depending on the pace and personality of the competition you may be better off to bid early and often, or to hold off until the later stages.
08. A Bidding War is OK
So long as you are bidding within your budget and you are dictating the increments rather than getting swept up in the heat of the moment.
09. If the Reserve Is Not Met.
Immediately let the auctioneer and sales agent know of your desire to be part of negotiations. Remember that auction conditions prevail and the highest bidder still wins and the sale is unconditional.
10. If You Don’t Feel 100% Confident.
Ask someone experienced to bid for you. Unicorn Buyer’s Agents will be your best ally on auction day and can make all the difference between losing your cool and losing the auction, or walking away with the trophy. If hiring us for the entire search process doesn’t suit you then you can hire us specifically to win for you at auction.
So there you have it, our very best tips and tricks to ensure your success at auction.
Want to learn more about how to find and secure your ideal property in Sydney’s competitive market? Find out more about the different services we offer as well as the fees involved for each service. Our auction bidding service starts at $750.
Do you have questions? I’d love to hear about your property aspirations and understand if i’m in a position to help you. If you’d like to book a free 20 min discovery call you can do so below. I look forward to hearing from you.
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