How to beat 10 other registered bidders
The client
This first home buyer was renting in a small unit complex that she absolutely loved. When a larger apartment came up for sale in the same complex, she was keen to buy it. She was unsure how to value the property, and was interested in being professional represented at the auction.
The property - 8/1 Chandos St Ashfield
Sydney has so many cookie cutter apartments and this was absolutely not one of them. A gorgeous 3 bedroom apartment with 3.3m high ceilings, that felt like you were living in a semi rather than an apartment. The space is light and air. While modern inside, the charm remains.
It was obvious from the outset that the apartment would be highly sought after.
The strategy going in
The guide was $1,250,000 which we knew was reflective of a 3 bedroom unit in the area. However, comparable unique properties in Summer Hill were selling well over the median price and so the research indicated that to be competitive, a buyer would need to be above $1,450,000 at least.
The research indicated it wouldn’t be worth more than $1,600,000.
We knew that there was solid interest in the property, with eight pre auction registrations.
The Auction
As the auction started there were eleven registered bidders. Interestingly though, seven of them never got a bid in.
The bidding opened on the price guide of $1,250,000 from an investor. Him and a first home buyer couple took the auction fairly promptly to $1,400,000 over the course of eight bids. The young couple were out at this point.
Another couple who were furiously scribbling down every bid in a notebook joined the investor at this point. In $5,000 and $10,000 increments the auction slowly headed towards $1,500,000. At this stage I could see momentum slowly, but also wasn’t sure if there might be someone else still sitting back and waiting to bid.
I came in at $1,500,000 hoping this would flush out anyone else sitting back.
The investor had a couple more cracks, but it was down to the other couple and myself.
$1,510,000 - The other couple continue responding in $10,000 bids
$1,520,000 - My bid to match them back
$1,530,000 - Another $10,000 bid from the other couple
$1,545,000 - My bid at this point was $15,000 to try and throw their strategy off course. The Auctioneer announces “we are selling”, usually a sign the reserve has been met
$1,550,000 - The other couple dropped their consistent $10,000 increments to $5,000 at this point; often a sign they are getting close to their max.
$1,565,000 - My bid here which was a higher increment designed to try and knock them out
$1,570,000 - The other couple came back with another $5,000.
I needed to respond with a small amount at this point to leave myself plenty of room between where we were, and $1,600,000. I matched them with another $5,000.
SOLD to us at $1,575,000.
The outcome
The best part of this strategy was our final bid was only $5,000 more than the last bid from the other couple - so when it mattered, we secured the property without paying more than we needed to.
We also finished the auction with spare change, reflecting a strategy which helped get the other couple to drop out as soon as possible.
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