10 Hot Tips for Buying At Auction

You might prefer to purchase by private treaty, but the home of your dreams is up for auction. Here are a few tips that might help.

Prior to the event

• Use your research and budget to help you identify a ‘walk-away’ price.   It’s in your interest to keep this a secret from the agent, so they don’t use this information to help the vendor set their reserve.
• Have your finance already in place and attend the auction ready to write a deposit cheque.
• Attend some auctions beforehand to experience the atmosphere and observe different bidding strategies.
• Organise any amendments to the contract, such as a longer settlement period, prior to the auction.  Talk to the agent and get agreement from the vendors in writing.

On the day

• If you’re going to start the bidding, start low.
• Project confidence – make the other bidders think you have no limit.
• Make your bids fast and assertive. Agonising over your next bid is a sign of weakness.
• Call out your offer in full (i.e. say “$350,000” instead of the increments, i.e “$5,000”).
• If it’s going to pass in, make sure you’re the highest bidder, as this usually allows first right to negotiate (whether this is a legal right or courtesy varies between states).
• Stick to your ‘walk-away’ price. It’s better to feel the short-lived disappointment of missing out on a property you love than the long-lasting remorse of paying too much.

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