Auctions are a bit like an old western shootout. You’re in a face-off against other competitors vying for the same prize, and if you’re thinking, “this house ain’t big enough for the two of us”; you’re right, there can only be one winner. To help you be the last one standing, here’s all you need to know.
Register your intentions: It’s not good enough to just turn up. You need to confirm your intentions are pure and register as a bidder if you want to play ball. Make sure you bring your ID (license is fine) and a pen to do so.
Don’t give too much away: The agent is representing the seller and this is business. Ask them lots of questions, but keep things like your budget and emotions about the property close to your chest.
Dress for success: No need to go over the top and rock up in a tux (no one likes a show off), but you should go to some effort to look presentable at the auction. You want people to know you mean business; but also, it will make for a killer post-sale Instagram selfie #homeowner!
Where to stand: Nudge your way up to the front of the pack. This will ensure the agent can see you easily. You’ll be able to angle yourself to check out the body languages and facial expressions of the other bidders, and hopefully get a read on them.
The waiting game: The agent will open the auction by asking for an opening price. Wait until the property is ‘on the market’ before bidding. Don’t waste your energy bidding until the property has reached the reserve. Until then it’s not on the market and there is no point bidding for something that isn’t for sale.
How to bid: It’s all about swagger; make sure the agent knows you’re there. When the bid is a big one, call out the figure in full numbers (i.e. three hundred and one thousand, not 301K). This not only sounds impressive, but it gives other bidders the impression that you’re confident with the price you’re putting forward, and hopefully scares them off raising you again.
What to do if the property ‘passes in’ (doesn’t meet the reserve): Then it’s time to snag yourself a bargain. The agent will seek more bids in attempt to save the sale, with the closest to the reserve getting the opportunity to negotiate with the seller.
The buddy system: If you don’t trust yourself not to get hot headed and caught up in the moment, take a friend to the auction. It’s your friend’s job to watch over you, keep you accountable and make sure you don’t let your emotions get the better of you when it comes to raising your price ceiling. In the same vein, it can be a rough blow to your house hunting aspirations to lose an auction. It’s your buddy’s job to keep the optimism high and make sure you’re laser focused on the next one. Onwards and upwards!
Come armed with a deposit: Unlike a private sale, there is no cooling-off period when you win at an auction and you’ll need to handover the deposit right then and there if you win. If you feel uncomfortable carrying around a cheque of such large value, you can use the ING Direct app to transfer the money in a pinch.
Heading to an auction this weekend? To get fully prepared, download the Spring 2015 Buyers Guide or call one of our Home Loan specialists on 1800 100 258.