The 4 number auction pricing strategy
Winning a property at an auction is an exciting feeling. Even better is knowing that you secured the property and it is within the budget you set and you are comfortable with the price you have paid.
There is a clear strategy you can put in place to help make this happen.
What do you need?
A pen and paper
Everyone who is buying the property in the conversation
So, what are the 4 numbers you need to all agree on and write down on a piece of paper?
Your Hip Hip Hooray price - if you buy the property for this price you will be jumping for joy
Your Hooray price - the price at which you would feel pretty happy knowing you’ve paid a fair price
The Walk Away price - what is the most you are comfortable paying for this property / what price are you prepared to walk away from it.
If you’ve ever attended an auction, you’ve seen the emotion that causes people to go above their “Walk Away” price. We know this happens, so it is better to prepare for this ahead of time and avoid auction day anxiety.
The Absolute Last Dollar to Spend price - you are willing the lose the property if someone is willing to pay $1 more (probably more likely $1000 more). This is final. There is no going above this on auction day and everyone (who will be an eventual owner) agrees on this price before the auction. You must be prepared to walk away at this price, regardless of the emotion on the auction day.
Write down your 4 numbers on a piece of paper and put this in your pocket for auction day. That is your plan, and now you stick to it!
If you would like to engage Purchase with Penny to bid at auction on your behalf, find out more about our Auction Bidding services.
