Auctions can prove to be a real battleground for buyers, with many fearful of paying over the odds for their property choice. However, with the right approach and mindset, you could bag that property without shelling out extra cash. Here are some practical and time-tested tips from our experts.
1. Check everything before you put in your bid. Make sure you do some leg work well before the day. Remember it’s your money and it’s your decision. Make sure you base your decision on some good substance.
2. Don’t give away too much. If you tell people how high you’re prepared to pay, it will put you at a disadvantage. Play it like a poker game and keep your cards close to your chest.
3. Know the true value. This means, do your research! You can find out what similar houses in the area went for by looking in the paper or hiring an independent valuer.
4. Get legal advice. Before you sign any documents, hire a lawyer to look through them for you. Do not be tempted to save a few bucks by doing it yourself as it can cost you tens of thousands.
5. Don’t bid too soon. Do not bid before the reserve price has been reached. The reason for this is because until this price is reached, the property isn’t for sale.
6. Keep your highest price a secret. The buyer has the advantage in an auction negotiation simply because they know the minimum price the seller is willing to accept without the seller knowing the maximum price the buyer is willing to pay. If you keep this price to yourself you have a good chance of saving thousands of dollars.
7. Try to speak to some other potential buyers on the day of the auction and ask them how much they think the property will sell for. Most of the time, people will quote their buying capacity unknowingly, which means you can suss out your competition. This is sometimes hard to pull of casually and takes some courage to do, alternatively walk around the pre inspection and listen intently to people talking around you.
8. Refrain from making any bids on the day of auction if no other bids are made, until the last minute and aim to be the first and only bidder. This allows you to negotiate after auction session with the vendor’s selling agent (no doubt the vendor will be feeling worried about the property not selling at auction and maybe likely to move).
9. Bid confidently. Deliver your bid with a loud, clear voice and for the full amount. Your quick and understandable bid might put your competitors off psychologically, making them believe that they should back down because you are nowhere near your limit and have endless amounts of money, shown by virtue of your confidence.
10. Ignore the agents coming up and befriending you throughout the process saying it’s your dream home or investment and its only $1,000 more. Remember – they are paid by the vendor and by law have to represent the vendor, not you.
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