The real estate auction is designed to motivate a frenzy of activity and an exaggerated sense of urgency, in order to acquire the highest possible price on behalf of the vendor.
For the buyer, it is an environment that demands a sensible strategy with pre-defined price ceilings based on robust local market insights – along with the best possible understanding of a seller’s motivation.
STRATEGIES THAT CAN MAKE THE DIFFERENCE:
Understand the value of the property
It isn’t always easy to know the actual value of any property you’re bidding on, especially in a market that moves as quickly as Sydney’s does.
There are, of course, comparative historical sales in the area to help guide a rough valuation but there are any number of factors that may impact upon the value of a particular property. For example, a large development application in close proximity could dramatically affect a property’s value.
So make sure you do your research thoroughly.
Set a ceiling for yourself and stick to it
It’s very common for buyers to become emotionally attached to a property. To the extent they end up paying a lot more than they should in light of the actual value of the property and their budgets.
It’s critical to establish a price in your head beyond which you will not bid… and to stick to it!
Don’t reveal your cards too early
Never let selling agents know what your limit is. This information will help him or her to play the room until they have reached your upper limit.
Ask the agent how many requests for section 32 and building reports have been made, to give you an idea as to how many bidders you may be up against.
Consider help from a 3rd party
Having a third party bid on your behalf can be very helpful particularly if it happens to be someone with some experience in real estate.
More and more, buyers are turning to a buyers’ agent to help them manage a successful auction process. This not only leads to better outcomes but also removes an enormous amount of stress through the process.
As auction partners to our clients, our role is to develop strategies that offer them an edge over the competition; in many cases designing these such that favourable deals are achieved without the auction even having to take place.
More than 25 years of exposure to the local agent industry means we have an inside track and direct access to the sales agents with whom you are likely to be negotiating.
At R&J, we offer ‘auction bidding and negotiation’ as a stand-alone service to many of our clients. So, if you have found a property that is due to go to auction and you hope to weight the outcome in your favour, we would love to be your unfair advantage.