Auctions usually require nerves of steel and in today’s market, deep pockets. But with more and more vendors choosing auction over a private sale, there’s never been a better time to school up on your skills. Take the stress out of auction day by arming yourself with these great tips.
First Things First – Finance
While it may seem a romantic notion to wander past a property and throw in the winning bid on impulse, the reality is that unless you are in an exceptional financial position you need to do your financial groundwork first.
Getting home loan pre-approval will allow you to bid with confidence, and will save you from doing some frantic (and incorrect) calculations when the bids start to rise. Having a budget and firm guidelines will go some way in helping you keep a cool head.
Fake It Till You Make It
While your insides might be quivering like they never have before, if you keep a calm and cool demeanour on the outside your body language will project a winging confidence. Someone who looks like they’re in charge and right at home at an auction can be intimidating to prospective purchasers. So be firm, bid confidently and clearly and watch the novices fall away!
Have Three Price Points
Another trick to stick to your financial plan and keep a cool head is to give yourself three price points. When you find the property you like, consider a bargain basement price that would make the deal a steal, a mid-range price that you think reflects true market value, and a ceiling price that is your absolute top-end limit. These price points will be good signposts throughout the auction, allowing you to stay on track and beat emotional overbidding.
A Numbers Game
Usually auctions move in round numbers with bids increasing around $5000 or $10,000 increments. If possible, slow down the bidding and limit increases to $1000 or $2000 at a time. Alternatively, if the bids are crawling very slowly and you’re keen to finish off the competition, consider a strong closing bid with a larger increase, to put a stop to counter bids and get you one step closer to calling your new property home.
Ultimately, no matter how well you plan your auction strategies you’ll still need Lady Luck on your side come auction day. Where a property experiences high demand, competition will undoubtedly be stiff. Sticking to your plan, budget and straight-thinking strategies will ensure you don’t bite off more than you can chew on auction day.