My top three auction strategy tips…
As a buyer’s agent I attend auctions most weekends and it’s fascinating the insight I gain from them.
At auctions, the emotions are high, the agents are frantic and the buyers are nervous. The only seemingly calm influence is the auctioneer who has all the lines and all the power. The larger the auction the more of these factors I see.
It’s led me to thinking about the mindset and emotions at play and how they impact the auction result. Given that the sales agent and auctioneer are usually the only ones with experience of the auction process, the everyday punter who turns up to buy a house, for perhaps the first time, is at a huge disadvantage.
How do we as the buyers avoid getting caught up in the emotional pitfalls that an auction campaign can create?
It’s easy – have a strategy and stick to it. Here are my top three auction strategy tips:
1) At least 48 hours before the auction sit down with all parties who are decision makers in the process and agree on a maximum price. Do not tell anyone what your top dollar is. Not even that nosey colleague at work and especially not the sales agent. Remember, he works for the seller.
2) Play out some scenarios in your mind of how the auction may run. Consider where it may start and if you would be comfortable starting the bidding. Or, would you only bid if it was called on the market? Everyone has a different strategy and no one really knows what will happen on the day, so make sure you are prepared for a few of the possibilities.
3) Stop thinking that the only way to be successful at an auction is to actually be the winning bidder. In my mind, if you have a strategy in place, and you stick to that strategy then you are successful. If you’ve exhausted your limit and the property goes for more than you were willing to pay than you too have been successful. You didn’t get caught up in the emotions, the spectacle and the atmosphere that an auction creates. And you didn’t feed into the seller’s dream of two emotional buyers going head-to-head in a fevered bidding war.
Look, don’t get me wrong – I love to see a property sold under the hammer after some genuine bidding from parties in the crowd. What I am sick of seeing though are agents on the phone to ‘prospective’ buyers who can’t buy under auction conditions or people being pulled in mid-auction to increase their bids well beyond what other bidders are willing to pay. All to pull a deal together that meets the seller’s expectations. In my opinion it creates an unfair situation where the buyer’s emotions are high and the more experienced agent takes advantage of these emotions to ensure the property sells.
If you find bidding at auction all too much and would like some help please get in touch. I would be happy to run you through some more tips.
Note: I originally posted this article on Linkedin: https://www.linkedin.com/pulse/how-successful-when-bidding-auction-jayne-robbins/