Yahoo Finance Auction tips: 8 ways to psych out the competition
Auctions can be stressful, especially when you have your heart set on the home of your dreams, but with the right tricks up your sleeve you can beat out the competition.
And, there are different tricks depending on whether you are attending an in-person or online auction as COVID-induced lockdowns have moved more of what we do online.
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Here are the top auction bidding tips from a professional buyer’s agent that will help you nab your future home.
If you’re bidding in person
First and foremost, for any auction you need to come in prepared, buyer’s agent Michelle May told Yahoo Finance.
Have your pre-approval ready to go and your game plan set.
1. Be confident
As with many things in life, confidence is key, May said. Taking control of the situation isn’t something you should be afraid of.
“You have to believe that this is the right home for you. If you’re confident and willing to win this property, don’t be afraid to open up the bidding,” May said.
Try striking up a power pose, which will not only intimidate the competition but can also help you feel more confident.
2. Disrupt the momentum
May said it’s important to have conversations with the selling agent to get their guide on the sale price and then compare that to what price the auctioneer starts the bidding at.
“They will give you an indication of where the bidding will start. So depending on where you sit and what your budget is, you may want to come in first at a high price, well beyond the reserve and disrupt the momentum,” May said.
However, if someone else beats you to the punch, sit back and watch for a while. You might find the property is simply going to go for well above your limit, or you can let the other bidders fight it out and come in at the end with a big bid.
If the other bidders are only focused on each other you have the opportunity to throw off the competition right at the last minute and come in with the winning bid.
3. People watching
You can learn a lot from watching and observing the other bidders before the auction begins, May said.
“For me as a buyer’s agent, I get a kick out of the buzz of auctions. You’re able to see people there, gauge their reactions and emotions and read the play,” May said.
“People watching is very important and gives you a unique advantage.”
One way to prepare yourself for the real deal is to attend other auctions for homes you don’t intend to bid on.
Go to other auctions - soak up the experience. When you have no skin in the game you can just observe. And because some auctions go so fast, you might even want to film it to analyse,” May said.
Body language can teach you a lot, but it’s not always about the person bidding. Try paying attention to their partner if they’re there with someone else.
While the bidder may be putting on a stoic front, their partner might look nervous or be moving around a lot - this can indicate they’re nearing their limit.
Another thing to keep in mind is that as a person approaches their limit, they will likely consult with their partner more often - whispering to each other and frequent checking in may mean they’re about to tap out.
This could be your chance to up the bid in a larger increment to take your competition out of the game.
4. Know when to walk away
Have a budget and stick to it, May said. There are too many people who get caught up in thinking a little extra won’t hurt and that’s not the right attitude.
Knowing when to stop is just as important as knowing when to up the ante.
“Do not get caught up in the whirlwind of an auction. And don’t listen to that agent in your ear, telling you that ‘$1,000 isn’t much more’,” May said.
If you’re bidding online
As COVID-19 continues to disrupt our daily lives, many auctions have moved online, which presents its own challenges.
The first weekend of the Sydney lockdown proved that imposed changes are making an impact, with clearance rates down approximately 20 per cent.
While the process of buying during a lockdown isn’t new, uncertainty is still proving a challenge, and slowly rising interest rates are another factor to consider.
1. Navigate the new environment
May said that learning to navigate online auctions is crucial as there are a range of issues to consider that just don’t come up when you’re in person.
“As someone who’s attended and bought at hundreds of auctions, I can tell you that nothing can quite prepare you for an online auction,” May said.
“Technical difficulties and bugs alone are a considerable challenge. I’ve had to face pre-registration issues, log-in challenges and even screen freezes mid-auction.”
2. Gaining an understanding of your competition
At an in-person auction you can see who you’re bidding against and can assert yourself to ultimately secure the property, but this can’t always be done online, May said,
“Online, things are very different as you may not see who you’re up against, and it’s harder to stand out as a formidable opponent. You often don’t even know how many people are registered,” May said.
“Try to build a strong relationship with the vendor agent before the auction. Being in contact with them during the auction helps navigate technical difficulties and ensures your bids are always heard.”
3. Consider making an offer prior to auction
Recently, it’s been notoriously difficult to purchase pre-auction, May said, but that doesn’t mean it’s not worth a shot.
“Be prepared to move quickly and have all of your ducks in a row. The offer process can be just as stressful as an auction, so planning and organisation are essential,” she said.
“Having an expert helping you decide when and how much to offer will dramatically improve your chances of success.”
4. Be as prepared as possible
May said that with the technical difficulties that can come from online auctions, you will give yourself a better chance if you are prepared for everything.
“Make sure you have the phone number of the agent saved in your phone so that if you have technical issues they are only a text message away,” she said.
“Make sure you have a pen and paper handy so that you can write down the bids just in case.”
It’s also best to be set up in a quiet space without any distractions so you can be completely focused on the auction at hand.
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