How to Bid at Auction

Buying a property is a huge commitment and nothing tests the nerves more than bidding at an auction.

One in two Australians report experiencing anxiety ahead of attending an auction and 48% of people said they’d lost sleep over it, recent research suggests.

Worryingly the St George Bank research also found a lot of us are ill-prepared to buy properties at auction, with 62.1% of buyers saying they do not have a bidding strategy when attending a home auction.

So what do you do if you want to secure that dream property at auction? There are three chief ways you can do it:

• Engage a professional buyer’s agent, to whom you pay a fee.
• Ask a friend or family member to bid on your behalf.
• Bid for yourself (if you’ve got the nerve)

  Advantages of using a buyer’s agent:

  • No chance of emotional ‘must have at all costs’ bidding;
  • No risk of paying beyond your pre-auction agreed maximum bid;
  • A professional who can read the crowd, knows bidding strategies and bids with confidence;

  Disadvantages of using a buyer’s agent may include:

  • Feeling detached from the purchase;
  • Engaging a buyer’s agent can add extra cost to your budget.

         Pros of DIY bidding include: 

• Can save lots of money;
• Puts you in the box seat to watch rival bidders;
• Can quickly respond with counter bid/change strategy.

         Cons of going it alone include:

• Not suitable if you don’t like crowds;
• Attending spouse/young children can distract/pressure;
• More likely to bid too high the heat of an auction

        Perks of asking someone else to bid for you include: 

• No emotional connection with the property so unlikely to bid higher than agreed;
• Trusted and expects little in return;
• Can help hold you to your limit, reducing temptation to bid beyond your means.

       Pitfalls of friends and family members doing your bidding:

• May feel they’ve let you down if they don’t win;
• If things go bad it could put relationship at risk;
• It is a big responsibility and they too may get nervous, so choose your proxy wisely.

For more information on bidding at auction please call Ray White Real Estate Narraweena 9984 7100 Ray White Real Estate Narrabeen 9970 6777