I was recently interviewed by the NZ Herald on strategies for bidding at Auction. Below is a copy of the article, with credits to Diana Clement.
It should be noted that every case is very different, and the strategies you should implement can vary depending on the situation and who you are bidding against.
If you do need any help I’d love to hear from you, you can contact me on 021 85 84 83.
Auctions can be a buyer’s nightmare. Bidders arrive with an emotional investment in the property, and are often pipped at the post by another buyer.
Sometimes the other buyer simply has more money and you’re never going to be able to outbid them. But more often than not, the loser has failed at auction psychology. Their auction strategy failed or they didn’t even have a strategy.
Agent Jason Yianakis of Lochore’s Real Estate sees it over and over again. Inexperienced buyers fall into auction traps like waiting until the end to bid. All that does is get the competition in a state of mind of believing the keys are theirs. Another common fail is not having done the preparation, he says. Being prepared means knowing valuations in the area, studying the particulars and conditions of sale, getting a LIM, doing inspections, having a builder’s report done and, if there is more than one of you, discussing the auction day with your partner.
There are some formalities. Make sure you register to bid — otherwise you won’t be able to buy. You also need to get your solicitor to look over the documentation in advance.
On the day, make sure you arrive early. You don’t want to be flustered. You’ll need your chequebook on hand because if you win you’ll
Being prepared means knowing valuations in the area, studying the particulars and conditions of sale, getting a LIM, doing inspections, having a builder’s report done and, if there is more than one of you, discussing the auction day with your partner.
Be required to sign the contract and pay your deposit immediately. At the auction, says Yianakis, make sure you: Know your top price. That means your real top price. However, it’s not uncommon in the heat of the auction for people to go above that price to get the home they want.
Position yourself in the room to see the other bidders. “It’s a competition between you and the other buyers. You don’t want them to think they are going to own it, but that you are going to own it no matter what”.
Open with an odd number. That confuses the opposition from the very first bid.
Be confident in your bids. As soon as your competition bids, bid straight over the top. This is what Bayleys agent Sam Yeung did very successfully when bidding on Alice and Caleb’s house in the second series of TV3’ s The Block.
Bid aggressively. You want to psych out the opposition. Coming in with a high first bid can do that. That’s exactly how the buyers of Jo and Damo’s house on The Block won the auction, says Yianakis. “They scared the rest of the competition off.”
Use king hit bids. If the opposition is going up by $ 1000 increments, hit them with a $10,000 bid to intimidate other people in the room. It shows you are serious.
Be erratic. Don’t always go up with the same increment. Mix it up. Go up $5,000 in one bid, $1000 the next, then $10,000.
Don’t stop to discuss. Whispering in your other half ’s ear is a mistake that shows the opposition you are wavering. Do the discussions before the auction.