Help...auction strategies...FHB

Hi all.
My daughter and her fiancée have finally agreed on a purchase.
The auction is on Thursday. Sydney South west.
The real estate agent said
“ go in with a low bid,and then bid quickly and hard against any other bids. To overcome them. “

Ok. So my kids want the place. But IF he said same to the 2 other bidders...acccording to him...what should we really do as a bidding strategy.

In other words...what should we do if all bidders have HIS advice.
Help

 

The agent works for the seller.

Your kids should bid up to their limit and stop at that.

 

Yes. They are sensible....but... I found it interesting that the agent gave bidding advice. I agree.
But is there a strategy against a agent advising this?
If the others take his advice?

 

There are other strategies. He seems to be advocating the small multiple bids. The other option is the knockout bid. One or two bids at a large margin from the other bidders. So if they are doing $1,000 increments, the knockout bid might be for $50,000.

The bidding may have reached that point anyway with smaller increments, but sometimes the other bidders are shocked by the large bid and pull out.

 

Ok.
Thanks.
Little less than Your example..price about $850,000. But I agree with the knockout bid.
So they should not bid early.?
Also what about an offer before given the scary sydney market.
Could they make an offer prior to auction and do they make a high offer.?..

Is this an experience based talent?

 

This is an interesting topic.

I would generally be extremely skeptical of any 'advice' provided by the vendor's agent. The agent may want to be trying to drive more activity/emotion by starting at the low point.

I have read different advice which is to start the bidding at close to what you think is the reserve - see this site:

13 tips for buying at auction

 

Or they could put an offer in writing. Give the vendors 24 hours to accept. Houses sell prior to auction all the time.

 

Hire a BA such as @Propertunity to bid for you.

Auctions are usually won by the person with the most money.
Strategy usually only works against those are unsure of themselves (eg emotional buyers).

To employ a strategy you need to understand how it works. If this is their first auction, then feel free to employ whatever strategy they want, but just know they'll only if they have more money.

My tip is to attend as many auctions as possible and watch how other people bid - its amazing how much you can observe when you're standing from the outside with zero pressure.

 

I'd never suggest doing this as it drags along, and upwards, all the low bidders up to closer to the reserve price where you may find yourself having to compete with them.

I agree with this.

 

In the current Sydney market, we are finding we can buy cheaper at auction that we could trying to buy prior! (for the first time in 5 or 6 years).

 

@Wanttoretire I posted this on my experience learning from other ppl bidding.

 

Update.
The kids wonn the auction , but over their limit.
3 bidders and they stayed. But the auctioneer kept really dragging it out when it was clear the last bidder was done.
They are very happy. But was way over the quoted price.
Ros

 

@Wanttoretire
How much over (percentage-wise)?

 

Quoted prices is often fodder for comedians.

Congrats on the buy. Hopefully it wasn't too much over your budget.

 

If you don’t mind sharing, how much over?

 

100,000 over. 50over their budget.
We thought that it would go over the price, but hope lives on.
But...hearts rule with PPR.
I am very excited for them.

 

12%
A lot!!

 

@Wanttoretire
That isn't too bad... under quoted by 12%
I'm use to Sydney where agents under quote by 20%.

Offers over $500k = Reserve of $600k