You could call watching an auction in Melbourne a much-loved sport. As the preferred selling method, there are a few factors to consider before you let your heart take over and bid above your budget. Unfortunately, bidding at auction isn’t an exact science; there are many methods, and every auction is different. If you are planning on bidding, you’ll stand in good stead to take these considerations seriously because, unless you have a never-ending bank account, making that winning bid can be a tricky ordeal.
Stick to your budget
This is the golden rule which always rings true, no matter what the circumstances. Paying more than you intended can lead to more than regret, so stick to your absolute maximum. Engage with your financial institution beforehand to be clear on finances, taking into account stamp duty and conveyancing costs.
Time your bid
This is a point of contention open to debate, but waiting to bid until the reserve has been met helps diffuse competition. The more bids there are, the more the auction’s excitement and intensity builds, encouraging others to get caught up in the one-upmanship atmosphere. 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, on-the-market bid. Also, bidding too strongly, too early, can push up the price.
Control your nerves, bid confidently and clearly, but refrain from appearing too enthusiastic as this can ignite other bidders’ competitive natures. A composed bidder isn’t caught up in emotions, meaning they are able to closely observe the auction and remain in control, financially and emotionally. Watch out for bidders who appear frazzled – they are probably over their budget and it’s your moment to step in.
Consider using a buyer’s agent
If you don’t trust yourself not to get caught up in the emotion of an auction, a professional, licensed bidder is a smart move. They know how to read an auction, will ensure you stick to your budget, be across the market conditions, and offer advice. Perhaps most importantly, they take the bulk of stress off you.
Auctions are an emotional and intense experience, but remember the deciding factor is your budget. If you stick to it and miss out on the dream home, you can rest assured there will be another perfect abode, and that you played your home-buying cards wisely.