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Expert Advice For Bidding at Auction

Expert Advice for Bidding at Auction

In the auction capitals of Sydney and Melbourne, auction clearance rates are currently at historically high record levels. For the last couple of months clearance rates have consistently been above 80%.

These statistics tell a very simple story. If you’re looking to buy a property at auction in Sydney or Melbourne, it is only by exception the property will not sell.

So now more than ever if you’re looking to buy a property at auction you need to be extremely well prepared in order to be in with a realistic chance of securing your dream property on auction day.

Keep reading to find out the most common mistakes people make when bidding at auction and what are the four things you can do to better prepare yourself for bidding at auction.

Common auction mistakes

As a Sydney buyers agent I read a lot of economic and property market reports and articles. It’s part of my job and it’s just one of the ways I keep up to date with what is happening in the market.

I can all too easily spot a media beat up in a storey. So when I read about some fantastic auction result where a property sells for hundreds of thousands of dollars above the reserve price I am immediately sceptical.

Sure there are always exceptions to the rule, but in most cases these results are based off a very conservative reserve price that both the agent and vendor know will be well and truly exceeded on the day.

The most common thing l see prospective buyers get caught out by at auction is by placing too much credence on the price guide quoted by the selling agent. I see this all too often when multiple parties register to bid, but shortly thereafter are stunned into silence as the bidding kicks off above their maximum bidding limit.

4 tips to best prepare you for bidding at auction

Below are my four tips to better prepare you for bidding at auction based on my experience as a Sydney buyers agent and with 20 years working in the property industry:

  1. Know what you’re buying into
    This means doing your homework on the property you are looking to buy. Remember when you buy a property at auction you buy it warts and all. There is no cooling off period. So given you can’t change your mind, you need to know exactly what you’re buying into in advance of auction day. I recommend you get your due diligence done (pre-purchase inspections) well before auction day. If there are any issues identified it will give you time to investigate how serious they are. If you then choose to proceed you can look into what it will cost you to deal with any problems. You can then factor this information into your negotiation strategy and setting your maximum bidding limit on auction day.
  2. Knowing what a property will sell for
    You absolutely have to do your own independent research on what a property should sell for. The best way to work out what a property should sell for is to research and inspect as many similar properties as possible and then follow up to see what they sold for. Even better, if it’s listed for sale by auction go along and see the bidding for yourself. In my view if you have done your homework properly you should always be in with a realistic chance on auction day.
  3. Go to as many auctions as possible
    The best way to prepare you for bidding at auction is to know what’s involved and what to expect. The best way to do this is by attending as many auctions as possible. Every property and every auction will be different. So the more you attend the more you will observe what happens and see firsthand the various strategies that bidders put into play and whether or not they work. I can’t stress enough here, the more auctions you attend the better prepared you will be for bidding on auction day.
  4. Missing out
    Yes that’s right! In life and in business I believe there are positives that can be taken away from every situation. If you miss out after bidding at auction don’t sell yourself short thinking nothing has been achieved. What you’ve essentially done is managed to get some very valuable practice in. Don’t forget practice makes perfect. You will be so much better prepared for next time having gone through the experience. Remember the more familiar you are with the auction process the more relaxed and comfortable you will be on auction day.

Attending auctions and doing your homework to work out what a property should sell for won’t cost you anything but your time. Be rest assured though, it will be time well spent.

Are you contemplating buying at auction? Check out 5 signs you need a professional auction bidder.

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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.

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