If you are looking at buying a new home or investment this year, odds are you’ll have to consider buying a property at auction.
So today we discuss the process of what to do before, during and after a property auction, including some great tips of what to do if the property passes in.
And even if you’re not planning to buy at auction in the near future, listen in as I discuss the psychology of negotiating with agents before and after the auction with Bryce Yardney.
A property buyer’s guide to auction success:
- If they have a good property for sale with the likelihood with strong buyer competition, most savvy vendors will put their property to auction.
- So don’t avoid buying at auction – there are a lot of good properties for sale by auction and if you know what you’re doing it’s a relatively transparent process.
- Prior to auction:
- Do your due diligence
- Get finance pre approval
- Get your purchasing entity organized.
- Get a solicitor to check the contract
- Have any inspections or reports organised.
- Attend as many auctions as you can and understand how they work. If possible check out the auctioneer who will be conducting the auction you’re planning to buy at.
- Do your research and understand your market. Know what the property is worth.
- Let the agent know that you are interested before the auction, but play your cards close to your chest.
- Get a copy of the contract and vendor statement checked by a solicitor.
- Why not get an experienced buyers’ agent on your team to bid for you?
- Bring a cheque book or bank cheque to the auction or organize an electronic payment.
- Determine the price you are prepared to pay prior to the auction. Pick three prices. A price you love, a fair price, and a walk away price.
- Never stop bidding on a round number – give yourself 3 or 4 bids above a round number.
- Arrive early at least a half an hour. Survey the landscape, see who is there, and find out who your competition is.
- Dress smarlty and portray confidence.
- Stand front and center and let people know that you are there to bid.
- Start with a strong bid and make your last bid as strong as your first bid.
- Be prepared to walk away if the price gets too high.
- If the auction stalls, put yourself into position to negotiate with the vendor when the property passes in by being the highest bidder.
- Don’t follow the agent inside like they ask you to. Show a position of strength on your own turf.
- Ask what the vendor’s reserve price is? Sound surprised. Then ask what the lowest price they are willing to sell for. This is just another starting point for negotiation.
- Don’t be afraid to drag out the negotiations if there is no other competition for the property.
- You are not obliged to meet the vendor halfway.
- This is where you would benefit from having a professional property negotiator on your side.
Links and resources:
- Bryce Yardney
- Michael Yardney
- National Property & Economic Market Update Promo Code: Podcast
- Dr. Andrew Wilson
- Ken Raiss
- Podcast Episode 14: Do Real Estate Agents Tell White Lies to Make a Sale? | This Is the Best Predictors of Future Success
- Podcast Episode 13: Learn to Negotiate Like a Pro from a Negotiating Pro
- Property Update App
Some of our favourite show quotes:
“If you come prepared with a plan, buying at auction can be a very exciting experience.” Michael Yardney
“A lot of buyers see auctions as highly stressful events and they are worried that they may pay more.” Bryce Yardney
“I like watching the auctioneer and the person selling the property. You will be ahead of the game understanding the techniques and psychology behind buying and selling a property.” Michael Yardney
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