The Perfect Auction Strategy

The client

Looking to upsize in the neighbourhood, this young family had recently sold their home. They were in the market and ready to buy now.

This property had a specific appeal to them of being single level as someone in their family needed the accessibility.

They’d identified a specific property that was going to auction and asked if I could represent them.

The property

On a 700sqm block of land, this was a turn key ready home designed for simple and fun family living. Four bedrooms plus a fully self contained wing means there is space for everyone in the family to enjoy.

The property had a price guide of “low $2’s”.

The strategy going in

With a guide of “low $2’s”, which really means $2,200,000, I’d considered comparable sale results of twenty other homes. The average price was just under $2.6m, but I knew this property was in an inferior condition to most of those compared.

I felt like fair value was somewhere between $2,450,000 and $2,550,000. This is the specific feedback I gave my clients 48hours before the auction…

I knew we were expecting five registered bidders and my auction day strategy was based on the competition and the market value.

The Auction

The auction kicked off at $2,200,000. There were three bidders who shuffled between themselves conservatively until around the $2,400,000.

At this point I strategically entered the auction, placed a couple of bids, and then indicated I was out. This was designed to try and weed out if other parties still had more in the tank.

Around the $2,485,000 mark it was clear there was only one other party and myself still in the auction.

My strategy now shifted to bidding in smaller increments to put pressure on the other couple that they just had to keep bidding. Make them think they just have to keep spending more and more money. When a couple talks between themselves before each bid it is also often an indicator they are not completely comfortable about where the bidding is at.

At $2,510,000 the property was called “on the market”.

Three more rounds of small incremental bids, and it was time to strike with a $10,000 increment and seal the auction in our favour.

SOLD to us at $2,535,000.

The outcome

We finished the auction more than $40,000 under what my clients were prepared to pay for the property! Plus the final sale price was in the 4% price range I had given them going in to the auction.

A fantastic result all round and super pleased for this young family moving in to their new home.