Late last year when the Sydney property market was heating up even more than the summer temperatures, I was out and about pounding the pavement one Saturday searching for a property on behalf of a client.
My schedule that day was jam-packed. In between 15 back-to-back inspections, I had a short 30-minute break and decided to go along and attend an auction in Sydney’s inner east. But this wasn’t just any auction. What I saw that day left me speechless.
The property being auctioned was a typical 2 bedroom, 1 bathroom unit with one car space in Paddington. It’s price point (low $700’s) meant it would equally appeal to both first home buyers and investors.
In this particular case it was a very well attended auction. Much like a coveted sporting match or contest, a good number of spectators had gathered to watch. There must have been a crowd of at least 50 people and a double-digit number of registered bidders.
The auctioneer spent a few moments starting with his usual spiel then called for an opening offer or bid.
At this point I want to make it clear that I was not acting on behalf of a client as a buyer’s agent. I went because it’s just something I often do. I love the theatre, competition and atmosphere of a good auction. But more importantly as a professional property buyer I consider attending an auction my practice and training.
Why do I need practice and training you ask? Not only does an auction give great insight into the state of the property market, with supply and demand on display for all to see, it gets me ready for those occasions when I am actually bidding for a client.
On this particular day, as is often the case, the crowd were initially quiet. With that said though, you could sense that any number of the single buyers, young couples and investors that were registered to bid were just about to make their play.
The auctioneer asked for an opening bid or offer again and then someone yelled out from the back of the crowd. An opening offer was made. It was for $765,000. The auctioneer clarified then confirmed the offer for $765,000.
At this point you could of heard a pin drop. The agents, auctioneer and crowd (including me) were gobsmacked. Based on other recent similar sales, in my view the property was worth low $700’s. The price guide quoted to buyers was mid to high $600’s. The opening offer was well above both.
Bewilderment set in and the crowd was completely silent. As I looked around disappointment was evident and etched on the faces of many. The auctioneer then spent the next 5 to 10 minutes trying to draw out further offers.
After announcing the property was on the market, there were no further bids made and the auctioneer concluded by saying ‘Ladies and gentleman today we have witnessed something you don’t often see. One bid and one bid only buys the property. Congratulations Sir!’.
In this particular instance the successful bidder clearly wanted this property. He planned to make an aggressive early offer and intimidate his competition. He set a lead that no one else was prepared to follow. His strategy was to win no matter what and on this occasion it worked.
In order to be successful when buying a property at auction you need to be familiar with the process and understand exactly what is involved.
The most important thing you need to know with an auction sale is there is no ‘cooling off’ period. That means if bidding goes above the reserve price, the property will be deemed sold at the fall of the auctioneer’s hammer.
Beyond that, bidding at auction and being successful at auction requires a strategy, supported by a plan of attack to ensure you are the winning bidder.
So in essence, the auction process is not unlike a game or sport with multiple competitors all vying to win. You need to set yourself apart from your competition and position yourself so that at the end you are the ultimate winner.
For more information on what a buyers agent does contact Shelley Horton from Albion Avenue today.
Shelley Horton is the founder of Sydney based exclusive buyers agency Albion Avenue. With a 20 year career honing her skills in every aspect of the property industry Shelley knows what makes a property worth buying and how to get the best deal.
The atmosphere created when a property is auctioned is often tense and exciting. The sense of urgency generated throughout the…
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