Bidding at auctions can be a high adrenaline event, especially for buyers who are unprepared for the high-stakes and fast paced action.
Research suggests that only about 40% of people or buyers who go to bid at an auction are actually prepared with a bidding strategy. This means 1000’s of bidders are going out each weekend with the intention to spend hundreds of thousands of dollars at the mercy of the market, vendor, seller and luck. A concerning thought.
As a result, homebuyers risk blowing their budgets, missing out on potential opportunities, or even losing faith in the bidding process altogether. Anxiety and confidence can be key elements in getting yourself the best deal, but research suggests that 48% of people will lose sleep leading up to an upcoming auction.
However, if you’ve done pre-auction due diligence, these feelings should not be weighing you down. When you’re prepared, you will feel confident and secure and the auction should be nothing more than the ground where you execute your decision.
Before the auction:
- Research the area – Compare prices, see what places are selling for.
- Prepare a bidding strategy – Some will observe the competition before joining the bidding. Others are happy to go strong and lead. Do whatever you feel most confident with.
- Attend other local auctions just to observe – Great opportunity to get a feel for the local market as well as gaining experience on the bidding process.
- Make sure you have a deposit prepared – Typically you are required to pay a deposit of 10% on the day.
- Determine your limit – set a limit and do not go over it under any circumstances! People are easily sucked in to the atmosphere and can become ‘emotionally compromised’. This is where mistakes are made.
- Arrive early to have a final inspection of the house as well as register your interest to bid with the real estate agent.
During the Bidding:
- Stick to your bidding strategy – It’s very easy to get caught up in the moment and make emotional decisions. Do not be caught off guard by other people’s bidding strategies either. Stick to your guns!
- Appear confident, even if you aren’t – Displaying a confident demeanour can be intimidating, whereas appearing apprehensive may give other bidders confidence and help them to drive up the price.
- Don’t go over your budget! – Make sure you don’t get too caught up in the moment and spend more than you have. Securing extra funds may prove very difficult and the difference could be tens of thousands of dollars. There are always going to be new houses coming on to the market, wait for the right one!
If you have enquiries, Madeleine Hicks Real Estate team is available to call today on: 07 3355 6845.