Auction Tips

LOL we've experienced and seen a lot of interesting stuff at auctions- given that we attend and bid on them practically on a weekly basis it's not hard . I like to inject humour personally, if I get half a chance. Also if you try meeting the auctioneer beforehand (to build a friendly rapport) and having a yarn this can also assist - it's much harder to be nastier/condescending to someone you've met.....

Re: smaller increments. Usually bidders slow down to smaller amounts when they're nearing their limit but we like to use them to slow down the auction if we feel it's getting too "carried away" too quickly. Remember that most bidders are nervous and adrenalin/thumping hearts can make them do silly things... like bidding over and above, despite best intentions. Fast-paced auctions can leave little "thinking" time for some buyers so slowing it down (or making bids deliberately difficult for auctioneers) can at times be a strategy that can pay off.

 

It often comes down to the individual person and how they like to approach things . Also it will vary according to the circumstances of the auction , the state of the market and the opposition

We've been to many auctions but usually as observers , just to gauge the state of the market .

The only time we've bought at auction was in Logan in around 2002 . The dept of housing were selling off four in a row . We weren't interested in the first , but the last three . The market was starting to warm up though not hectic and most buyers were investors looking for good deals . I came in fast and hard on the second and the auction was over in about 1-2 mins . Every counter bid I came straight back . I stood on one side so I could see the other bidders , but basically just looked at the auctioneer

Next auction I did exactly the same and after a few bids I saw a couple shake their head as to say , if he wants it that badly he can have them . Same thing happened at the third .

After third purchase a couple of the other bidders came up and said I'd done well .

Cliff

 

some great stories and input!

 

Auctions are fun to watch, but personally I hate bidding in auction, because it is really hard not to bid over your limit. All tactics described above are probably good and depending on an auction they might work or not. But only advise I can give you is that whatever you do, stick to your limit. If you are not professional and do auctions for your living (like some of forum members) it is psycologically really hard not to exceed your limit.

 

I'm lucky to have a fairly strong grasp on my emotions so I've never had a concern about bidding beyond my max but my suggestion to those with that potential is to hire a BA or someone else to bid on their behalf with a pre-determined limit.

Reminds me of an auction I was bidding at.

Watched a FHB duke it out with an investor while a bloke in a suit and sunnies stood by in the corner, waiting. I had an eye on him..

Just as it looked like things were about wrapped up and FHB was going to win, the guy in the suit (bidding on behalf of a client it turns out) came in hard.

Auctioneer threw to the FHB who was in the lead seconds ago "Sir, would you like to bid?"

FHB "I'm already over my limit. One moment" (then he confers with his partners). Yes, this ACTUALLY happened. He said he was over his limit, out loud, at the auction he was bidding at.

Stunningly, the FHB then proceeded to play ping-pong withe the guy in the suit, biding the price up another $50,000.

He still missed out.

But goes to show how much emotions can come into it. The property sold for $650,000 so he exceeded his limit by nearly 8% of the purchase price. Insane.

 

Late bidder, ideally just before the final gong. Look disinterested as much as possible. That was my father's strategy anyway.

 

Assuming bidding for IP

1. Disengage emotions, this is business!
2. Do not concern yourself with anything you can't control both before and during the auction.
3. Prior to auction do your research thoroughly and know what you're willing to pay (that means know where the numbers stop working from both a cashflow and CG perspective) and do not exceed it.
4. Bid with confidence, your research will have determined the properties value so no need for nerves. (It is nerve racking so learn to act!).
4. You will have to play it by ear but do whatever you can to avoid getting into a bidding war with an emotionally engaged bidder.
5. Be prepared not to win (you're not losing but instead making a sound business deciosion to walk away).
6. Don't risk not winning by trying to get it at a "bargain" price (e.g. by getting into a bidding war using small increments), especially in a hot market.

 

All of the above tips & tricks are good (and we use them, like Jacque said, on an almost weekly basis) and can sometimes bluff another bidder out of going higher BUT in the current Sydney market, the only advice I could give to someone wanting to win at auction is to have more money than anyone else, and be prepared to spend it.