The country’s top auction bosses have revealed their secrets to winning an auction without blowing the budget as buyers increasingly find themselves in a battle to secure their dream property.
More properties are expected to be sold by auction in the coming months, and the current shortage of stock is expected to create more demand.
Ray White’s latest data shows there is an average of 3.9 bidders per property, up 90% on the same period last year.
But the auction leaders at some of the country’s biggest real estate agencies say the key to winning could come down to bidding quickly and bidding strongly.
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Ray White lead auctioneer Sam Steele says more than half of the participants who make the first bid go on to win the auction.
The key is to crunch the numbers and be clear on a budget well before heading into the room, he says, and exude confidence right from the start.
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“It’s all about asserting yourself in that situation. A lot of the time, people sit back and wait, but what they are actually doing is allowing their competition to get warmed up and be comfortable with the auction.”
He recommends a strategy of fast, strong bidding to try and intimidate the competition and continuing until the buyer hits their budget – if it gets that high.
“A lot of the time the people who get in early and bid strongly and portray that confidence, and portray an image that they’ve just got so much money and can just keep going and going, which can certainly intimidate some of the other bidders.”
Fast bids also put pressure on the competition, he adds.
“If someone bids against you and you bid pretty quickly straight over top, what you are actually doing is putting the emphasis back on them that they then now have to make a potentially life-changing decision in a small amount of time.”
Harcourts national auction manager Shane Cortese says an auction room can be a stressful environment for some people so it’s important to go in with a good mindset and tell yourself this is going to be a good opportunity to buy that house rather than dreading it.
“I haven’t been in an auction room yet when somebody has put a gun up against your head and said you must bid. You are given the opportunity to make decisions and you are given the opportunity to make multiple offers on a property, not just one, which is really helpful, and you can go up in increments that make you feel comfortable.”
Another way to take the pressure off the bidder is to get a buyer’s agent, another agent in the same office or maybe someone linked with the agency to bid on their behalf, which is a strategy both Steele and Cortese recommend.
“If an agent wants to help you, remember we are in that environment all of the time, we are not going to make you spend more money than you are comfortable spending, but we are going to take some of the heat off you by bidding on your behalf,” Cortese says.
If he thinks a property is worth $1 million then he will allow the agent to bid up to $950,000 in any increments they like with speed on his behalf. If it reaches that level, then he would quickly re-evaluate what to do on the spot.
But whatever happens, Cortese says, don’t hesitate.
“Because you’re bidding with such confidence and such speed, it is enough to put a little bit of doubt in the under-bidder’s mind.”
He also suggests making a bid even if there is only one bidder because it signals to the seller that they are serious about buying the property.
“Just don’t sit on your hands and do nothing, it doesn’t buy property and it doesn’t endear yourself to a negotiation with an owner.
“The majority of times the owner’s expectations are above where the market probably needs to be and buyers’ expectations are below where the market probably needs to be, but if you want that owner to perhaps meet the market you’ve got to show them that you’ve got intent to be there.”
Harcourts national auction manager Shane Cortese says getting a buyer's agent to bid on your behalf could take some of the pressure off. Photo / Supplied
People new to auctions should also become comfortable in an auction environment and auctioneers recommend attending other auctions run by the same auctioneer first.
Cortese says they might even go up and introduce themselves to the auctioneer who is going to call the property.
“Go see what their voice is like, what happens when a property is on the market, how they conduct themselves at auction and all that sort of stuff, so you are comfortable with their voice by the time you come to auction.”
Barfoot & Thompson operations manager Vaughan Borcovsky says all auctions should be available to the public so people should go and get a feel for what happens including how people bid and how the auctioneers operate.
Buyers should do all the research on the property beforehand and on auction day, his advice is to “bid early, strong and confidently”.
“I think people have some perceived ideas of what works and what is the best strategy – do you come in early or last or whatever. At the end of the day, if you want to buy the property the best advice that we can do is for you to signal to the room and to signal to the vendor that you want the property so bid strong and be upfront and be early with your bidding.”
Top tips for bidding at auction:
- Observe other auction sessions first.
- Research the property.
- Crunch the numbers on the property and work out your budget ahead of time.
- Consider getting an agent to help you bid and work out an auction strategy.
- Bid early, bid strong and bid fast.
- Project confidence.
- Bid until you reach your budget.
