03 5261 2104
Auction – a word that can be very exciting but also slightly intimidating. In real estate terms it essentially refer to a method of sale where a property sells to the highest bidder. If you’re contemplating placing a bid at a public auction, it can be an overwhelming process — especially for first-time participants or those seeking to purchase their first property. Fortunately, we are lucky to have Geoff Bennett on our team as our Company Auctioneer. With over four decades of experience in the industry, Geoff possesses valuable insights on effectively conducting and succeeding at auctions and is happy to share a few of his top tips.
1- Do your market homework
Whether the market is booming or flatlining, research is paramount to ensure you can make educated choices and appropriate bids. Look at comparable properties that have sold in a similar location with proportionate attributes. This should give you a fair indication of where the property’s value lies.
2- Inspect the property prior to auction day
Typically, the property should be open for public and private viewings before the auction event. This allows you to inspect the property in a lower-pressure setting, giving you the chance to carefully consider aspects such as the upper and lower limits of your budget. Additionally, it offers an excellent opportunity to engage with the agent and assess the level of inquiry generated.
3- Attend other auctions
This will assist you in getting a feel for the process and the varying outcomes that can occur. An added bonus if you can attend an auction where the same Estate Agent is conducting – that way you can familiarise yourself with their personal approach and tactics as an auctioneer.
4- Familiarise yourself with the language
Property terminology in general can be confusing, let alone if it is being spoken to you at rapid speeds and in a stressful environment. You can take some of the pressure off yourself by learning the basic lingo so you’re across what is happening. Here are some of the terms we recommend being familiar with:
- Absentee Bid: A bidding approach designed for individuals unable or unwilling to participate in a live auction is known as absentee bidding
- As is: referring to the condition the property is being sold in, including any flaws and imperfections
- Bid Increment: the amount by which the bidding is increased generally determined by the auctioneer
- Comparative Market Analysis: an estimate of a home’s price based on recently sold, and similar properties on the market in the immediate area
- Gavel: The name of the auctioneers hammer
- Paddle: A numbered item representing the bidder’s assigned identification at the auction upon registration. To submit a bid, raise your paddle, and the auctioneer will acknowledge you. Please note that some auctions may not use paddles and just take a hand raise as a gesture of bidding
- Passed In: When the highest bid has not met the vendors expectations/reserve. This will also happen if no bids are received. Properties will generally go to negotiation after being passed in
- Reserve: The minimum price that the vendor is willing to accept on the property. It must be set at or below the estimate and if the bidding ends prior to the reserve being reached, the home is likely to be passed in
5- Phone a Friend
If you are apprehensive about bidding, consider asking a friend, family member with previous experience, or another estate agent to bid on your behalf.
6- Arrive Early
This allows you to secure a good position to bid from, observe other interested parties, and gauge the general activity/attitude towards the property.
7- Start Low
Don’t be afraid to kick offers off at a reasonable price at the lower end of the range. The auctioneer will advise whether your bid has been accepted and should also advise when the property hits the reserve – don’t be afraid to ask if you are curious.
8- Counter other bids quickly
This will project confidence and may throw off or unsettle other bidders.
9- Stay alert
If it appears the property is going to be passed in, ensure you are the highest bidder at that point (providing the bid is still within your budget) as this will give you the first opportunity to negotiate with the vendors post-auction.
10- Remember Auction Etiquette
There are few rules which apply to bidding at an auction except that you cannot be disruptive and you cannot attempt to prevent someone else from bidding – fines can apply for such actions. The best approach is to remain calm, positive and respectful.
Numerous scenarios can unfold during an auction, and thanks to media portrayals, we witness a spectrum of scenarios and varying dynamics including speed, price fluctuations, bidding strategies, and emotions. If you are interested in discussing the intricacies of purchasing at auction, the McCartney Real Estate team is more than happy to assist you.
For further information or to arrange a conversation with one of our agents, get in touch on 03 5261 2104.
