Your Auction Strategy

Creating a Winning Auction Strategy

When heading into an auction for a property you have your heart set on it is important that you have an auction strategy mentally in place so that you can set yourself up for success. Throughout the auction process, there are a few simple yet key things to remember so that you leave the auction a winner.

• Understand the auction process

If you haven’t previously attended an auction then it is definitely in your best interest to include this in your auction strategy. Attending auctions as a spectator allows you to understand what happens in an auction and gives you a pressure-free introduction to the auction world. You will be able to see how the auctioneer creates urgency and excitement around a property and you gain insight into how buyers respond when under pressure.

• Do your research

To buy any property, be it at auction or not, you need to be equipped with the market knowledge you will need to stop you paying too much for the property you like. If you do not do property buying as a career, this can take you months and even then you will only have scratched the surface and probably missed out on many opportunities. TIP: Get this right and everything should fall into place. Get it wrong and you could be eating baked beans for years!

• Stick to your budget

This is the most crucial auction rule and one that you must abide by. Set your limit before entering an auction and don’t go over it no matter how much pressure you are feeling. This is one of the only rules that applies in all situations. Not sticking to this rule can turn your dream home into a financial liability and ultimately a nightmare.

• The early bird gets the worm

Arriving at an auction early gives you a really good chance to see how interested in the property others are and also gives you a chance to do last walk-throughs of the house. Additionally, arriving early will give you time to register to bid and see how many others have registered.

• Be in control of your emotions

At an auction emotions = money. Remember, no matter how invested in the property you are you cannot place bids with money you don’t have. Making this mistake could be one you end up regretting for many years to come.

• Wait until the reserve has been met or bid from the start?

If the reserve price hasn’t yet been met the property isn’t truly for sale, so why bid? This will indicate to the auctioneer that you are a keen buyer and this may mean there will be added pressure on you later in the bidding process. Conversely, bidding first means you can control the auction if you are bold enough to do so. This does take experience and is not for the faint hearted.

• Never bid against yourself

This may seem like a silly rule, but it is something that must be emphasised. If you are new to auctions, then your emotions will run high and the auctioneer will have no problem putting pressure on you.  Under these circumstances, it is not uncommon for people to bid against themselves. It is okay to feel the pressure, but bidding against yourself literally, has 0 value, and can potentially leave you thousands of dollars out of pocket.

To learn more about developing an auction strategy with an auction expert, get in touch with a buyer’s agent contact us today