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There’s nothing quite like attending your first auction and seeing the characters at play – the charismatic auctioneer with the overpriced suit and the Hollywood smile, the throng of sticky-palmed bidders and nosy neighbours waiting in anticipation, the stressed-out vendors hiding in the shadows.
The experience can be exhilarating and exciting, but it can also be frustrating and disappointing if you miss out on your dream property after months of looking for the right one. That’s why it’s a great idea to organise your finance through trusted mortgage and finance brokers like us, prior to the auction. And if you’re still on your auction L-Plates, fret not. Here are 3 tried-and-true auction strategies that really work.
1) Adhere to the Scout Motto: Be Prepared!
Before you begin bidding, it’s important that you do your homework. If you’re a first home buyer or new to the auction scene, visit plenty of auctions and familiarise yourself with the process. That way, when you go to bid on your dream home, you’ll feel confident and ready. Above all, research your market and the property you wish to purchase thoroughly.
It’s crucial to have a solid understanding of your financial position and budget before the auction. Talk to us and we’ll help you work out your maximum borrowing capacity, help ensure your deposit is ready and arrange pre-approval through your lender of choice. Having this document on hand, which verifies how much a lender is willing to lend you, will give real estate agents and vendors confidence that you’re a serious buyer.
Lastly, when you decide the property you’ve chosen is the right one for you, it’s important to perform your due diligence. Undertake all building and pest inspections before the auction. Have your solicitor review the contract and make amendments, such as a longer settlement period, if needed.
2) Ooze confidence
An auction is like a game of poker – each player has different cards to play, but they’re all in it to win. In order to be successful, you need a strategy and you need to act it out with conviction. Devise a plan beforehand and stick to it.
When you begin bidding at the auction, you must radiate confidence so you don’t get elbowed aside by the other bidders. The competition will be looking for any sign of weakness, and you must not show your nerves. Even if you’re trembling like a jellyfish inside, it’s all about smoke and mirrors. Be aware of your body language. Position yourself at the centre of the bidders, stand tall, and make decisive movements.
3) Be brave, be bold
When the bidding begins, your best bet at scaring off the competition is to hit back with assertive bids. Come in with a solid early bid if possible. Your competition may be taken by surprise and lose their nerve.
You need to give the impression that your wallet is bottomless, while still making bids within the scope of your buying capacity. After every bid, come back immediately with your counter-bid. Do not hesitate. Remain in control, even if your heart is in your mouth, and with a bit of luck you will blow the competition out of the water.
Mistakes to avoid
Experts recommend against waiting until the very end of the auction to bid. Go in strong from the beginning instead, even if that means making the first bid. Don’t rely on your own instincts throughout the auction process, but rather, carefully consider any advice the agent has provided, particularly relating to the reserve price. Avoid asking whether the property is “on the market yet” in the middle of an auction, as this may irritate the vendor and discourage them from negotiating with you if the property is passed in at auction. And remember, if it all seems too daunting, you can nominate a phone bidder to bid on your behalf.
Being confident and relaxed is an important part of being successful at an auction. It really helps to be sure of your financial position and your budget before you raise your hand for your first auction bid, and that’s where we can help. As your trusted mortgage and finance broker, we can help you determine your buying capacity and the kind of home loan products that may be right for you, make sure your deposit is ready to go and arrange pre-approval with your lender of choice. Please get in touch today.