Purchasing a property is a big decision and can often be quite daunting. Auctions play a major role in how properties are sold in Australia so it is important to feel comfortable about bidding at auction. If you don’t feel confident in bidding, your agent or perhaps a friend or relative can convey these bids for you as long as the relevant paperwork has been completed prior to the auction starting. Here are some tips that will help you in determining a bidding strategy
1. Don’t Strategise too much: We conduct approximately thousands of property auctions each year and can tell you that each one is different. Don’t get caught up in worrying about what will happen or how the bidding will unfold. Focus on what you are there to do and that is purchase a property. Be the first person to bid. Our experience shows us approximately 70% of people who open the bidding, buy the property.
2. Bid with confidence: Many buyers sit back and wait. They want to get a feel for what is about to unfold. More often than not, it is the bidder that bids with confidence and without hesitation that walks away with the keys to their new home. If someone bids, come straight in with another bid. You have nothing to lose and everything to gain. Show your competition that you want the property at any cost. Set the pace don’t chase the pace.
3. Set yourself a base limit: If you are going to set yourself a limit make sure that limit has flexibility. As strange as that may sound, too many times I have seen bidders miss out on their dream home for $1k or $10k when the other bidder is at their limit also. In a very short time you will be happy for going that little bit extra
4. Don’t forget your Identification: It is a requirement by law that you register for all auctions in QLD. The easiest way to register is with a driver’s license. If you don’t have ID then you cannot register, so don’t forget. To save time on auction day there is the option to register prior to the day. Contact your agent for more details.
5. What happens if a property is passed in: Most auctions we facilitate have conditional buyers (buyers that can’t bid under auction terms and conditions) waiting hoping that the property passes in. Should the property pass in, everyone will have equal opportunity to submit their offer. If you can bid under auction terms and conditions, give it your best shot at the auction as it is the most transparent way to buy and in most cases, less competition.
6. What is a vendor bid: In QLD the auctioneer is allowed to make 1 or more bids up to but not including the reserve price on behalf of the vendor. A vendor bid must be disclosed by the auctioneer. It is not the reserve price and does not indicate a price at which the vendor will accept. A vendor or seller bid is used in different circumstances to either start the bidding, increase the bid to a level closer to what the vendors will accept or position a property at a price at which the vendor will take bids nothing less than.
7. Why might an agent or auctioneer ask you to increase your own bid: This is a common occurrence in today’s market so don’t feel uncomfortable about it. At some point in the auction, the estate agent or auctioneer may come up to you and ask you to increase your own bid. This may occur as your current bid may not be at a price at which the vendor will accept. Therefore you may need to increase your own bid if you wish to purchase the property.