Don't get left behind the pack. Here are 10 tips to dominate your next auction.
1. Dress to impress. Present yourself well – perhaps even wearing a suit – to create the perception that you have the money and budget to beat the competition.
2. Park a prestige car (if you have one or can borrow one) at the front of the property so that you can stand next to it and create the impression that you are ‘cashed up’ and have the funds to buy the property.
3. Ask a question at the beginning of the auction to direct attention towards you – specifically one that may make other buyers hesitate. For example, has the body corporate raised any special levies? What about the development plans next door? Is the car park on title? These questions may unnerve inexperienced bidders.
4. Keep your body language and gestures positive and confident at all times. Try to make direct eye contact with competing bidders with a confident ‘ice-cool’ stare.
5. Ensure you have a pre-auction limit and stick to it. There is no use getting emotional at an auction and overpaying by tens of thousands of dollars.
6. Question the agent as to how many contract requests and building reports have been commissioned. If it’s likely there will be a lot of competition, wait for someone to make a low bid before placing a higher one about $10,000–$20,000 below your estimated reserve price. For example, if the agent is quoting $270,000 plus and someone opens at $250,000, you should increase the bid to $300,000 to show you mean business. This also cuts out the bargain hunters, as even lower bidders can get emotional and increase their bidding levels – which has a snowball effect of increasing everyone else’s budget.
7. Typically, most properties have a reserve price, below which the property will not be sold – at least to begin with. Ask the auctioneer “Is the property on the market? Has the reserve been met and are you selling?” If the bidding stalls, the auctioneer and agent will go inside for a break. They may try to convince the vendor to lower their reserve price and put the property on the market for an unreserved sale.
8. Call out all your bids with full numbers. For example instead of ‘$1,000’ call ‘$301,000’ so other bidders hear exactly where the bidding stands. Call out all your bids confidently and assertively like you are not going to stop and will continue until you buy the property. Volley bids straight back without hesitation.
9. Break down your bids to slow the bidding if required. For example, if the auctioneer asks for $5,000 bids, offer $1,000 or $2,500 bids so that the momentum is slowed.
10. Use knockout bids, by doubling or tripling another bidder’s amount to try and psyche them out. You can also pretend you are out and wait until the third call, before coming in again with a knockout bid.
