How to Bid Successfully at Auction?
Monika Bonet, Principal of Raine & Horne Glenelg offers these tips how to bid successfully at Auction;
1. Attend Similar Auctions Prior
Attend as many similar auctions as you can in the weeks leading up to your auction. This will allow you to better understand the system and observe your Auctioneer in action. It’s not in your best interests to be a complete novice at the auction, during which you plan to make a purchase commitment.
2. Check out the Venue
If the auction is to be conducted ‘in-rooms’, locate the venue and any transport or parking facilities well prior to the auction date. This may avoid a last minute panic and the possibility of missing out on the property that you’re interested in purchasing.
3. Arrive Early
Arrive early and get comfortable. If you need help, bring along a friend or an agent to bid on your behalf. In this instance your proxy bidder must register or otherwise your bid could be thrown out. Also by arriving early you can strategically locate yourself so you ca clearly see the Auctioneers and the other bidders.
4. Establish Your Financial Limit
Establish a limit of how much you’re willing to spend on a property, and be prepared to walk away when (or if) the bidding exceeds your limit.
5. Understand the Bidding Process
Get a feel for the bidding process before you start. If you’re not sure get a Licensed Land Agent to bid on your behalf.
6. Start Bidding When Bids Are in Your Price Range
Start bidding when the figure is below or within your price range. Don’t be shy about opening the bid at a figure to suit you, and don’t hang back until the last bid. You should participate within your price range or you could miss out.
7. Observe the Bidding Increments
The Auctioneer will generally set the bidding increments, depending on the price of the property and the pace of the bidding. Bid in these increments and don’t be too eager to raise the price unnecessarily.
8. Know What’s Happening Around You
Know what’s happening around you. Don’t hide otherwise the Auctioneer may miss your bid.
9. Bid Strongly
Bid strongly with confidence! This shows people that you’re serious about buying.
10. Bid Quickly
Bid quickly in the later stages of the auction when the bidding slows down and there are only a few bidders remaining. If you hesitate, others think it’s your last bid, and this encourages them to keep going. (Likewise, underbidders should realise that others bidding quickly and aggressively are trying to scare you off).
11. Don’t wait until it’s declared ‘On The Market’
If you have been advised not to bid until the Auctioneer announces that the property is ‘on the market’, you may have been badly advised. Most professional auctioneers won’t say this as the terminology is false. After all, the property has been on the market since the day the signboard has been erected and the first advertisements appeared either electronically or in print.
12. What happens just before the hammer falls “SOLD”?
When the bidding slows or stops at a figure acceptable to he vendor, the auctioneer will announce that the property is to be sold. As a precaution and to assist underbidders and any ‘last minute’ bidders, the Auctioneer will give the first call and repeat the price, then a second call repeating it again, and finally, a third and final confirming that the property is sold. The Auctioneer then brings the hammer down “SOLD”!
13. What’s the difference between a property being “Passed In”, compared to “Held Over”?
When the Auctioneer closes an auction and announces that the property is “Passed In”, this means that the last auction bid has not met the Vendor’s expectations, and the auction is closed. This is very different to when the Auctioneer announces that the auction is “Held Over”, in this instance the Auctioneer is only suspending the auction, whilst negotiations continue between the highest bidder and the Vendor can take place. If a successful outcome can be reached the Auctioneer will then re-open the bidding later in the day, and the bidder will be able to make another bid (and if acceptable to the Vendor) the Auctioneer will give the first call and repeat the price, then a second call repeating it again, and finally, a third and final confirming that the property is sold. The Auctioneer then brings the hammer down “SOLD”! This means the property can be SOLD under Auction Conditions.
14. What Do You Need To Do Before You Bid At Auction?
Prior to bidding at auction you should;
- Have your finance approved.
- Have any building or pest inspections carried out on the property.
- Have your deposit accessible, (usually 10% of the purchase price) as you will have to sign the contract and pay the deposit if you are the successful purchaser.
15. Do You Need Further Help?
If you’re not confident of bidding or you need the confidentiality of bidding, call Monika Bonet of Raine & Horne Glenelg, we can bid on behalf of you as a professional service.
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Watch this Youtube Video about how Raine & Horne can help you at Auction…
Monika Bonet is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Property Management expert.
