What’s the best way to win an auction? Pay the highest price. What’s the next best way to win an auction? Bring some swagger.
Oh yes, swagger.
Swagger (v): to move with confidence, sophistication and to be cool.
When it comes to securing your dream home at auction, a bit of swagger will freak out the opposition and have you calling the removal company quicker than you can say Kanye West.
Paying the highest price at auction… sounds simple enough, right?
Well kind of. When you’re in the thick of the excitement, tension and competition, your chance at success comes down to how you play the game (and how well you can freak out the opposition). Here are a few good ways to do just that.
Bid fast and bid strong
Before you walk through the door, have a budget clear in your head. That way you won’t need to hesitate before making a bid. Make your bids fast and confident. This makes you appear as though you won’t stop until you have secured the property.
Don’t mess around… bid in grunty increments. Again, it will freak out the competition. If you choose to bid before the property is on the market, make your first bid a big one. Ideally, you’ll take the bidding as close to the reserve as possible and immediately knock out any low bidders.
State the whole number
Call out your bid in whole numbers. If you’re increasing the bid by $10,000 don’t call out “10” – call out “$710,000”. Again, this makes you appear confident and gives the impression you’re comfortable with where the bidding is at.
Fake it ‘till you make it
Dress well and look the part. Use body language to show you are entirely confident and relaxed in the environment.
Keep calm (Kanye would)
It’s a good idea to have someone with you that also knows your top price. They may help keep you calm if emotions start to build up.
If you’re a couple, definitely go together. Often in a relationship one person is more of a risk taker while the other may be risk averse. The middle ground between these two is about perfect for an auction!
Go for the knockout
Follow up a competitor’s bid by doubling or tripling it. This is a great way to psyche them out. Or wait until the auctioneer is about to reach third call before coming in with a knockout bid. Even if the property is passed in, you want your bid to be the final one so you’re in a position to negotiate after the hammer falls.
Know when to hold ‘em, know when fold ’em
Know when to walk away. There’s nothing wrong with switching to Plan B. It’s a much better option than stretching yourself beyond your budget because you got carried away in the heat of the auction moment.
A big part of success at auction is confidence. And for most us, confidence comes from knowledge. So spend some time researching the Auckland property market. Go to other auctions, and do loads of research on the property you’re interested in.
Know how auctions work and the code of conduct. If a property is passed in on a vendor bid, then negotiations are carried out with all bidders. If the property is passed in on a purchaser bid, then that bidder has the first right to negotiate with the vendor. You want to be that final bid.
Know what it feels like to be at an auction. It’s probably best if your first time at auction is not for that dream home you desperately want to buy.
What type of house is it? If the house was built between the 1950’s and 1970’s, it should be good. But if the house was built between 1980 and 2000, it’s probably best to get a property check done as part of due diligence prior to auction.
Auctions: why, why, why?
If the thought of trying to purchase something without knowing the price makes you shiver, then it’s worth understanding why people so often choose to go to auction.
According to REINZ March 2015 stats, 25% of properties in Auckland go to auction. So, the chances of your dream property being sold by auction are pretty high.
Often sellers are more satisfied with the outcome of an auction because they can see what people are willing to pay so they feel satisfied they achieved the best result. Also it’s often a quick process. Even if a property isn’t sold under the hammer, it will often sell by negotiation within a day, or at worst, a few days later.
Not knowing the price does seem frustrating. But with good advice from your real estate agent and a thorough understanding of the current property market, you’ll have a good understanding of whether or not the property will fall within your price range.
Once you know that, and you know your own budget, get your game face on. And go for it!
About The Property Market
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