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In his column for Switzer, John McGrath discusses the bets ways to win at auction.
Here’s what he had to say:
This Saturday (February 18) and next Saturday (February 25) are shaping up to be very big auction days in Sydney.
Given the shortage of stock throughout 2016, competition among bidders was particularly fierce across the city and many buyers missed out.
If you’re among them, you’re probably feeling a bit anxious about trying again this year.
But you have to get back out there, particularly now when we tend to see a surge in new listings before the Easter break.
You’ll find you have more choice now, but competition will still be strong.
Confidence is a key component of buying at auction and knowledge helps build confidence.
So this week, I’m going to give you some of my best bidding strategies to help you get over the line this auction season.
1. Start low
One of my tactics is to make a low bid to start the auction.
At the outset, you don’t know how many interested parties there are and how much they’re prepared to bid.
So there’s no need to put in a high bid in the early stages.
Just place a low bid and see where the auction goes from there.
The other advantage to bidding first is the auctioneer will note your interest and keep an eye on you, so you’re less likely to be missed when the bidding heats up.
Once the bidding starts, just sit tight, size up the other bidders and watch how the auction unfolds.
I wait until near the end of the auction, when the bidding has slowed down and the other bidders are starting to lose steam, to place my next bid.
The auctioneer will start the ‘going once, going twice… ’ routine, and then I’ll come in with a clear and confident bid.
If the other buyers make further bids, I will immediately respond with a higher bid.
2. Project confidence
The one auction strategy that I have observed working consistently is creating the impression that you will continue to bid until you own the home, no matter what.
It’s about projecting confidence and psyching out the other bidders.
More timid bidders are often put off by an aura of unstoppable self-assurance and they’ll stop bidding.
3. Assertive bidding
My bids are fast and assertive.
Agonising over every bid is a definite sign of weakness.
If a buyer is looking worried and having hushed conversations with their partner every time they make a bid, that’s a clear signal they’re near (or over) their limit.
So keep your cool, even if you’re only a few thousand from your limit.
Don’t hesitate on your bids.
If other buyers are dithering over their bids, you can knock the wind out of their sails by immediately responding with a higher bid.
Be prepared to bid confidently up to your limit and then walk away.
I also recommend calling out the amount of your bid in full, rather than just raising your paddle.
This allows you to project confidence and determination with your tone of voice.
It also reinforces the full price being bid, rather than the increment, which might only be $5,000, $1,000 or even $500.
When the bidding is down to small increments, it’s easy for buyers to lose sight of the amount of money being bid.
Calling out the full amount of your bid is a reality check for other buyers.
4. Stick to your walk-away price
The rapid pace of auctions leaves you with little time to make decisions on the fly.
Rather than putting yourself in this position, it’s advisable to think through all the angles before auction day.
You have to go into an auction knowing at what figure you absolutely will not make another bid.
5. The hand of fate
On the day, the person who wants the property the most and has the biggest chequebook will buy the home.
You need to be mentally prepared to miss out, particularly in hot markets, so having a slightly fatalistic approach can help.
Go hard for what you’re after, but in the back of your mind accept that if circumstances prevent you from owning the home, there’s probably a message in that.
Experience has told me that fate plays a hand in finding the right home and you should go with it.
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