The auction secret no one tells you!
An average week in Sydney generally sees about 700 - 800 auctions scheduled. In springtime, this can hit over 1,000 in one week. It's fair to say, Sydney real estate agents love a good auction campaign. For buyers, auctions can be brutal.
The harsh truth is there is only one winner on the day, regardless of how many potential buyers are there.
They all do building reports, have solicitors review the contract, re-run their numbers and organise bank deposits. Yet most of them walk away empty-handed.
When you tell a friend, colleague, or the local café owner that you are going to auction on a property - they all give you their two cents worth. Some will say to bid early, maybe to bid unevenly to confuse people, or to even let the property pass in without bidding. The advice is endless.
Here’s the thing: There is no perfect auction strategy because every auction is different.
Each auction has a unique combination comprised of:
The vendor and their expectations
The property itself with its own pros and cons
The sales agent with their own strategy
The auctioneer
The others bidders at the auction
But, there is one hack that most people don't talk about!
And it sounds counter intuitive, but hear me out…
If you aren’t going to be the successful buyer, and you aren’t going to be the second highest bidder… then STOP BIDDING.
Do not give away what your maximum budget is... Because that information may be used against you down the track.
If you are bidding on a property for sale by a franchise agency or an agency with a large area footprint - then that "data" about what price you bid and on what property is available to all their sales staff. If the next property you try and buy is through the same company, then they know what you have to spend.
Plus, often agencies have staff attend other agency auctions to take note of who bid and up to what price point. If you've told an agent "I am interested in this property but we are going to auction this Saturday to try to buy (insert property address)" - then a good agent would have someone from their office there to observe what you were prepared to pay.
That is simply the sales agency doing their job… working for their vendor!
This is also why it is key to know what the property is likely to sell for before the auction (spoiler alert: this is not the price guide!). You want insider knowledge on the vendor's motivations, the agent's tactics, how the campaign has played out, who else will be registered to bid and recent market results. All information that a good buyer's agent will find out before the auction.
If you won't be walking away with the keys, then at least be sure you are walking away without disclosing all your cards.
I know it sounds easier said than done, and if you don’t bid at auctions regularly then I acknowledge how this may seem impossible. However, as someone who does bid at auctions regularly and knows my marketplace very well - it all comes down to having the right strategy and executing it on the day.
To find out more about our auction representation service, click here.
