How to succeed at auction
Whether you win or lose in an auction environment, your success rate depends on how you play the game.
Employing smart strategies and displaying ongoing patience are two key steps to ensuring that you will succeed at auction, regardless of whether or not you secure the property at bidding time.
Do your research
From first-time buyers to seasoned investors, doing your homework is an essential component of building or enhancing wealth creation.
Auction research means investigating not only median house values in your region, past, present and projected, but also conducting first-hand research for the real estate on offer.
Learn to know your neighbours. Discuss with them the perceived benefits and potential pitfalls of buying the property in question. Are your would-be neighbours considerate, respectful, tolerant and peace-abiding, or noisy, disruptive, ever-changing and unreliable?
Good neighbours are an important part of investment strength and lifestyle kudos when choosing to purchase a particular property in any given region.
Pay particular attention to nearby amenities and future developments. Is the big picture for schools, community centres, transport networks and business centres in good shape?
Talk to local council members to assess what’s on the drawing board for public buildings and other essential developments in your neighbourhood or region.
Consult the estate agent or property representative
You may be able to glean not only the reserve price but also the agent’s expectations for the final sales result. Find out if the vendor is amenable to prior offers and what figure might be acceptable, in terms of market value and successfully securing the property before the fervour of auction fever takes hold.
Read the fine print
It is essential that you seek qualified legal advice when reviewing and before signing any real estate contracts. From a legal standpoint, lawyers and conveyancers can highlight any leverage that you can use to your benefit during the lead-up to auction. This includes the possibility of longer or shorter settlement periods, reduced deposits and any personalised terms and conditions.
What to do on auction day
If you are a first-time bidder or simply an anxious buyer, would you be better off employing a qualified buyer’s agent? Doing so can bring a wealth of knowledge and product services to the auction equation, without an excessive fee.
Buyer’s agents typically seek out properties that meet their client’s criteria and negotiate the purchase of the property chosen, whether by private sale or auction. They may focus on a specific property, or an entire portfolio, depending on the client’s investment needs.
If your heart is set on the property in question and you’ve conducted due diligence, many buyers would be wise to engage a buyer’s agent. The chief aim of a buyer’s agent is to bid on behalf of the potential buyer at auction.
This is because bidding at auction can be intimidating and emotionally daunting — so it can help to have someone objective to represent your needs in the heat of the moment.
Lastly, if you are employing a buyer’s agent, sit back, relax and trust in their expert guidance and auction strategies.
If you are doing the bidding, prepare to stick to your game plan, no matter how high the stakes are raised. Exercising caution and control will stand you in good stead for auction success, either immediately or at the next auction.