💫12 Days of B&W Finance - Day 7💫
So you’ve got a competitive streak in you, you live for nothing but the very best and love a good bargain when you can get your hands on them.
Out of all the Christmas lights on the street, the ones you put up shine the brightest – while it may run up your electricity bill, they’re good things you put up with.
But being outbid at auctions and getting your time wasted? Those are things you shouldn’t have to put up with.
Here’s day 7 of our 12 Days of Black & White Finance – tips for going to auction!
"On the seventh day of Christmas, Black and White Finance gave to me: Seven tips for auction,
- Six low deposits,
- Five lenders lending,
- Four guarantors,
- Three construction loans,
- Two different rate options,
- And a head start on my first home"
To bid or not to bid, that is the question
First things first, once you have pre-approval from the most suitable lender and they have done all the prerequisite checks on your identity, your income, and your assets and liabilities. Then you are ready to go to auction.
When you get to an auction for a property you like you need to size up your competition!
See how many other potential bidders show up and note how many people are actually inspecting the property and commenting on it, often you get people who don’t want to bid but are just curious at how high the selling price ends up being, perhaps so they can get an indication on how much they can list their own property for.
Ask the vendors agent how many contracts have been issued and see how many people will be bidding.
On the big auction day, don’t be afraid to throw your weight around! Sometimes, opening the bidding with a strong bid (within reason) will immediately eliminate a majority of people bidding.
1 bid, 2 bid, I bid, you bid
When at auction you want to control the ebb and flow of the event, think of yourself as a puppet master pulling all the strings.
Market research data has revealed the average bid incrementation sits at around $10,415, with the most common knockout bid being a flat $10,000.
Knowing this, there are little tricks you can use to show your competition you mean business.
For starters, make your first bid an odd number, this is because most people go in with a preconceived number in their head (700k, 750k, 800k, etc) and anything under or over that will make them think twice about outbidding you.
So for example, instead of starting the bidding at $700,000 you can start at $695,000 and get the incrementation to go up by $5000 effectively halving it, then when the last few bidders have outbid each other by 5000 you can make your final odd number bid of $757,000 and hopefully secure the property.
Body Talk
You can actually tell a lot about how serious your competition is or if they are reaching their limit by simply looking for tell-tale signs in their body language.
Whilst they may not be as obvious about it as glancing left and right while sweating profusely, it’s usually the subtle hints that paint the clearest picture.
For example, couples that talk in hushed whispers mid auction, make eye contact with each other after a bid or even make phone calls throughout can indicate they are close to their limit.
When you go to auction, go with bravado and your body language will reflect this and others will take notice too.
Other signs are that your competitors are taking gradually longer intervals to bid, (chances are they are hoping you won’t bid any higher) so make sure you trust your instinct and act accordingly. If you can bid again, do so with aplomb and it will send a message to their subconscious that they aren’t going to buy the property.
Are you bidding me?
The last thing you want is to be intimidated by the auctioneer as they try and get higher bids out of people.
Auctioneers are known to create a sense of urgency in the crowds – after all, it is their job to hype the property and get the bids flowing.
Don’t go in with FOMO (fear of missing out) and rather than make decisions based on emotions, make them on logic and factual information.
If you adopt a ‘devil may care’ attitude people will know you aren’t someone to be taken advantage of, although if this isn’t in your character you may want to get someone else to bid on your behalf.
Final Thoughts
It all sounds so animalistic when you think about it; you assess your rivals and the situation, go in and assert your dominance, look for signs of weakness and finally strike with a well-crafted and thought out bid. We just need to know our numbers, understand the budget and stick to it.
If you go in with a clear mind, avoid all the drama and trust your gut and the numbers, you’ll more than likely come out on top.
And if you don’t, well, hopefully you won’t have to wait for next Christmas to find the right place!
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