Bidding at an auction in a HOT market
- Thread starter MsAli
- Start date
Good luck guys.
I agree with the posters who talk about setting a set budget. For strategy, people talk about all sorts of different things but my view on it is to just do what's comfortable to you and at the end of the day it's not going to make much difference if you bid early or if you bid late.
I agree with the posters who talk about setting a set budget. For strategy, people talk about all sorts of different things but my view on it is to just do what's comfortable to you and at the end of the day it's not going to make much difference if you bid early or if you bid late.
I'd say it's just the luck of the draw in terms of who you end up bidding against. We missed out in many auctions before finally getting our PPOR that way. If there are people who get overexcited then they will bid more. Finally enough, the house we ended up getting was both nicer and cheaper than the ones we missed out on so it worked out well. I know it's easy to say but try not to get too disheartened if you miss out. There's another one around the corner. Good luck 
Hi guys,
We lost the auction as it sold for $640k ($110k more than the market valuation). We didn't even get a chance to bid.
Earlier this morning we went to observe another auction up the road and the land was much bigger, not a corner block, on the low side BUT had a lane way/park on one side and it sold for $558k. That one had various shakey bidders who weren't sure and were constantly on the phone or whispering to each other. So we were confident have a much better chance at this one at around $590k or so as the land was smaller.
Wish we had bid on that one this morning but we just loved this lot due to it's elevation and location.
Thanks for your responses!
Now back to the drawing board.
We lost the auction as it sold for $640k ($110k more than the market valuation). We didn't even get a chance to bid.
Earlier this morning we went to observe another auction up the road and the land was much bigger, not a corner block, on the low side BUT had a lane way/park on one side and it sold for $558k. That one had various shakey bidders who weren't sure and were constantly on the phone or whispering to each other. So we were confident have a much better chance at this one at around $590k or so as the land was smaller.
Wish we had bid on that one this morning but we just loved this lot due to it's elevation and location.
Thanks for your responses!
Now back to the drawing board.
Sometimes things don't happen for a reason. Usually something better, more suitable and more opportune will present itself in the future.
I was the under-bidder at an auction last year (with conditions of the seller remaining as a commercial tenant for three years) and they were in fairy la la land with price expectations. I bought it this year for 25 % less.
Next............
You can always look at it the other way someone just paided 110k over what the market value is,better to keep your hand in your pockets
I was at one auction in Brisbane a few hours ago and the so called winner
went way over the top,the agent standing there doing her bit after all it's not their money,the other party who gave up while walking a few mts in front of us was giving her husband a real going over for not going the extra 10k never thought private school girls talked liked that,pity him when he gets back too the rented high-end new farm unit..
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This seems to be the most common theme presented.
I'm a bit of an auction newb, having only attended about 6 auctions. One of those auctions we were the bidder, and one my father was successful at.
At the one we bid on, we had a limit, which we stuck to. It was going to be our PPoR. The auction slowed down to just two bidders, me and another man about the same age at about 50K below my limit. We inched up at $ 500 per increment. In the end there were 114 bids all up. Both the agent and the auctioneer said it was the most drawn out auction they had conducted. I stopped at my limit and they knocked it down to him for $ 500 more.
Lesson learnt, the auction price is set by the 2nd highest bidder.
Was rather disappointed at the time, but 6 months later we purchased a far better house, in a better suburb, on a quieter street, on a bigger block, in better condition for the same amount. In hindsight, I'm glad we lost the auction.
My father broke the golden rule when he bid at auction. He was representing a consortium of 4, and had his set limit. Unbeknownst to us, our building inspector was the other final bidder and as it turned out, he also had the same limit.....which we also didn't know. The bids ended up reaching the common limit, with the builder landing on the number. Dad put his hand up again, which ultimately knocked the builder out. Everyone in the consortium was having kittens cos they had no idea the builder had reached his limit !! It was knocked down to him and the builder was spewing. Four years later, the value of the property had quadrupled.
Sometimes breaking the pre-determined limit "golden rule" can pay handsome dividends.
Did you ever use that building inspector again?
Years ago I did a Sale under a writ of execution to recover a debt for a client. I needed an agent valuation/appraisal for the Bailiff. I was going to bid (client gave me the OK and the ethics dept at the Law Society cleared it) but a health scare put me out. 2 bidders show- a professional ex solicitor bailiff auction hunter and the agent - bidding on behalf of his wife! Sold for 25k (plus 130k existing mortg)- agent did a quick reno-kicked the tenant out and on sold 3 months later for 240k.
MsAli- I agree with the others- it wasn't meant to be and there are always other opportunities out there.
havent bidded on auctions but id set my limit and if i really want it will go over it by maybe 1k as then you know you missed out and it went over what you wanted rather than maybe getting it then next turn and if 1k is going to make or break it then it wasnt worth it to start with
purchased a car on online bidding for $100 more than what i wanted to pay
they went $50 over my bid so i done the next bid for $50 more and won it
it would suck knowing you missed out on something you want for a few dollars
purchased a car on online bidding for $100 more than what i wanted to pay
they went $50 over my bid so i done the next bid for $50 more and won it
it would suck knowing you missed out on something you want for a few dollars
You could rock up with some bikees... Just make sure you pay them because you don't want to owe a favour!
... joking of course. there have been multiple articles about this on the Gold Coast
definitely the 'stay silent, then come in strong' strategy works. especially if you have some age on the other bidders. It can really rattle them if they see an older bidder come in late and drop a decent offer.
You (and partner) need to remain 100% emotionless throughout the period. No facial expressions. Think sunnies and a cap (poker style).
I know people that have rented porsches and rocked up late making a scene and i know people that have done the opposite and been really emotional.
You just need to read the day and other bidders. It really is an art.
Best of luck!
... joking of course. there have been multiple articles about this on the Gold Coast
definitely the 'stay silent, then come in strong' strategy works. especially if you have some age on the other bidders. It can really rattle them if they see an older bidder come in late and drop a decent offer.
You (and partner) need to remain 100% emotionless throughout the period. No facial expressions. Think sunnies and a cap (poker style).
I know people that have rented porsches and rocked up late making a scene and i know people that have done the opposite and been really emotional.
You just need to read the day and other bidders. It really is an art.
Best of luck!
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This thread sounds like what happens on Ebay almost every time.
Lots of emotional buyers, who stay silent until the absolute last second, and then go whammy and pay too much for some doodad.
(Saw it happen loads of times with a sowing table my wife was trying to buy over the last several months)
With house auctions, the PPoR is an emotional purchase (unless you are an SS member with an investor mentality who is too pragmatic.)
Work out what your maximum spend amount is, and wait until the r/e screams out "Are you all done? Going twice..." and if the last bid is below what your maximum is, then bid.
Not before.
With any luck you will be the successful bidder whether passed in or not, and if so; negs can commence.
(Reality check: Hopefully you are somewhere near the reserve of the Vendor, and of course; this won't happen because the r/e has advertised it way below the reserve to get more interest, and/or the Vendor has lied to the r/e about what their real reserve actually is.
Another wasted Saturday, really.)
Lots of emotional buyers, who stay silent until the absolute last second, and then go whammy and pay too much for some doodad.
(Saw it happen loads of times with a sowing table my wife was trying to buy over the last several months
)With house auctions, the PPoR is an emotional purchase (unless you are an SS member with an investor mentality who is too pragmatic
.)Work out what your maximum spend amount is, and wait until the r/e screams out "Are you all done? Going twice..." and if the last bid is below what your maximum is, then bid.
Not before.
With any luck you will be the successful bidder whether passed in or not, and if so; negs can commence.
(Reality check: Hopefully you are somewhere near the reserve of the Vendor, and of course; this won't happen because the r/e has advertised it way below the reserve to get more interest, and/or the Vendor has lied to the r/e about what their real reserve actually is.
Another wasted Saturday, really.)
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I would approach an Auction for PPOR and IP differently.
If you are purchasing for PPOR purposes and it is the house that you would want to live in given its location, appeal and you know it is definitely the one etc., your budget can be stretched. Be prepared to pay that little extra but to a realistic limit. Determine this by doing your research of what other houses are selling the in the area for/on the same street.
If it is for IP purposes, do your research and stick to your budget 100%. Do not go a cent over what you have planned. Always believe other bidders have more money to spend. If you miss out, you miss out ... just move on.
My tips:
- Be commanding, clear with your bids.
- Shout out the whole price figure instead of increments (i.e. say if your bidding from $500,000 to $506,000, say $506,000 instead of $6,000) this lets bidders know your not mucking around and know exactly where your bid is at
- Where you stand is up to you but generally I would stand at the front facing every body, try and stare the other bidder down. Inexpereinced bidders will get put off by this.
- Form a bond with the Auctioneer before the Auction. Tell the Auctioneer and selling agent your "false" situation how you are a developer in the area that your are planning to sell, that you have purchased and sold many properties in the past. An agent/auctioneer is more likely to want to sell the property to you given they could potentially get repeat business and throw down the hammer faster, instead of squeezing every penny out of the every buyer. This is what many don't understand. You will soon realise why some Auctioneers tend to down the hammer a lot quicker to their 'known repeat business clientele' rather than the 'first home owner couple'.
- Do not let the Auctioneer or other bidders control your bidding. You call the shots and bidding increments. I.e. be different and do not follow the crowd. Other bidders will think you are a season pro at auctions.
- Bid in odd increments always and keep the other bidders guessing
- Dress to impress
- Most importantly relax and ensure your heart rate is kept at a low.
- It is all about your stage presence and performance you give. Don't be sympathetic for the other party who is missing out.
Attend as many Auctions as you can within the area your looking to purchase to get a feel of the Auction atmosphere and witness how others are bidding. Do not get let down if you miss out time and time again on properties. It is all about the mentality. Think of why you missed out, (i.e. did the final bidder pay too much, were they emotionally attached to the property, did they want to purchase to purchase no matter the cost, do they own properties adjacent, they had more to spend etc.) You should come out of the auction with no strings attached if you missed out. Don't think of it as a missed opportunity but more a learning experience. Be happy and excited if someone clearly paid too much for the property as they have made a bad investment and you saved yourself thousands of dollars.
If you are purchasing for PPOR purposes and it is the house that you would want to live in given its location, appeal and you know it is definitely the one etc., your budget can be stretched. Be prepared to pay that little extra but to a realistic limit. Determine this by doing your research of what other houses are selling the in the area for/on the same street.
If it is for IP purposes, do your research and stick to your budget 100%. Do not go a cent over what you have planned. Always believe other bidders have more money to spend. If you miss out, you miss out ... just move on.
My tips:
- Be commanding, clear with your bids.
- Shout out the whole price figure instead of increments (i.e. say if your bidding from $500,000 to $506,000, say $506,000 instead of $6,000) this lets bidders know your not mucking around and know exactly where your bid is at
- Where you stand is up to you but generally I would stand at the front facing every body, try and stare the other bidder down. Inexpereinced bidders will get put off by this.
- Form a bond with the Auctioneer before the Auction. Tell the Auctioneer and selling agent your "false" situation how you are a developer in the area that your are planning to sell, that you have purchased and sold many properties in the past. An agent/auctioneer is more likely to want to sell the property to you given they could potentially get repeat business and throw down the hammer faster, instead of squeezing every penny out of the every buyer. This is what many don't understand. You will soon realise why some Auctioneers tend to down the hammer a lot quicker to their 'known repeat business clientele' rather than the 'first home owner couple'.
- Do not let the Auctioneer or other bidders control your bidding. You call the shots and bidding increments. I.e. be different and do not follow the crowd. Other bidders will think you are a season pro at auctions.
- Bid in odd increments always and keep the other bidders guessing
- Dress to impress
- Most importantly relax and ensure your heart rate is kept at a low.
- It is all about your stage presence and performance you give. Don't be sympathetic for the other party who is missing out.
Attend as many Auctions as you can within the area your looking to purchase to get a feel of the Auction atmosphere and witness how others are bidding. Do not get let down if you miss out time and time again on properties. It is all about the mentality. Think of why you missed out, (i.e. did the final bidder pay too much, were they emotionally attached to the property, did they want to purchase to purchase no matter the cost, do they own properties adjacent, they had more to spend etc.) You should come out of the auction with no strings attached if you missed out. Don't think of it as a missed opportunity but more a learning experience. Be happy and excited if someone clearly paid too much for the property as they have made a bad investment and you saved yourself thousands of dollars.
Thank you all
Thanks to all who contributed to this thread and some other earlier threads about auctions. Useful information which we used last week. It was only the second auction I have ever attended so I needed as much info as possible. We had earlier presented a written offer which was rejected but ended up buying for a few thousands less at auction
I waited till the bidding slowed down to increments of 1k and when nobody else was bidding asked the auctioneer whether the property is in the market and then offered a reasonable price. After a few phone calls, the property was in the market. A few other reluctant bids came up and I bid more confidently and aggressively and got it. But well, I reckon there were no other serious investor buyers as a buy-reno-sell strategy won't work at the property. So probably because there were no emotional buy-reno-keep buyers, it was easier for me. There were a few FHBs but probably they thought the reno costs will be a lot. I felt bad at the end because of the aggression I showed and regret I didn't wish the other bidder to find a better property soon.
Now the fun part of getting the Finance. Time for Colin Rice (FMS) to prove himself
Thanks to all who contributed to this thread and some other earlier threads about auctions. Useful information which we used last week. It was only the second auction I have ever attended so I needed as much info as possible. We had earlier presented a written offer which was rejected but ended up buying for a few thousands less at auction
I waited till the bidding slowed down to increments of 1k and when nobody else was bidding asked the auctioneer whether the property is in the market and then offered a reasonable price. After a few phone calls, the property was in the market. A few other reluctant bids came up and I bid more confidently and aggressively and got it. But well, I reckon there were no other serious investor buyers as a buy-reno-sell strategy won't work at the property. So probably because there were no emotional buy-reno-keep buyers, it was easier for me. There were a few FHBs but probably they thought the reno costs will be a lot. I felt bad at the end because of the aggression I showed and regret I didn't wish the other bidder to find a better property soon.
Now the fun part of getting the Finance. Time for Colin Rice (FMS) to prove himself
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