Much like most things in life, if you were to ask 10 different people their auction bidding strategies you would get 10 different answers. The “best way” to bid at auction can vary on a number of factors, including the popularity of the property, number of bidders, your budget and emotional tolerance. Here at Noel Jones we’ve compiled our top tips for bidding at auction to help you on your way.
- Know your budget. Prior to arriving at the auction be sure to know your budget and where your limits are. It’s vital that you engage with your financial institution to be clear on finances, taking into account stamp duty and conveyancing costs. You should also aim to get pre-approval from the bank before bidding at auction. Doing your due diligence on the location, house and previous sale prices for similar homes in the same location can also help to shape your budget and what you are willing to spend on a particular property.
- Waiting to bid until the reserve has been met can help to diffuse competition. As the more bids there are, the more excitement and intensity builds, encouraging others to get caught up in the heat of the moment. If you wait until close to the auction’s conclusion many would-be buyers will have reached their limit, allowing you to arrive with a strong bid.
- Bidding too strongly, too early, can push up the price. Starting high with your opening bid can be a strategic way to weed out low-ball bidders and get the best possible price for your property, however, without expert training in reading the crowd it can also cause the price to be pushed up if the bid doesn’t blow the competitors out of the competition.
- Emotions can get in the way. Auctions can be a high-pressure situation where it’s easy to get caught up, and if you’re not prepared you could end up paying more for a property than planned. If you think you’ll find it difficult to emotionally detach from the excitement of the auction it can be a good idea to ask a trusted friend or relative to do the bidding for you. Another option is to consider a buyer’s agent who can bid and negotiate on your behalf to ensure you don’t go over budget.
For more information, or to talk to one of our Noel Jones experts, visit noeljones.com.au