When you’re looking to buy a property, one thing you’re certainly not looking to do is spend more than you need to.
For that reason it makes sense to avoid buying at auction, which is a process specifically designed to leverage competition and get the biggest price possible out of a property sale.
Sometimes though buying at auction is unavoidable, especially if the market is hot or you are buying in an area that is either sought after or has a shortage of available properties.
Low interest rates and a lack of new listings have seen auction numbers increase across Australia in recent times as more sellers realise it makes sense to play desperate buyers off against one another to get the best result.
So, if fate would have it that you cannot avoid buying at auction, consider ways to reduce the pain on the hip pocket and secure your new home for something that comes close to resembling a bargain.
So how to do it?
You are probably sick of hearing the same old clichéd advice…get your finances in order, research the suburb and do your due diligence, get pest inspections done in advance, forego your daily cappuccino to save a deposit…you’ve heard it all before right?
There are however some more unusual ways to gain an advantage.
First, it’s important to bid with confidence at the auction. Confidence can make a lot of difference, just ask a poker player.
Think how you would feel if a rival bidder stepped up as casually as you liked and upped the stakes every time you made a bid…maybe had a yawn here or there…acted like they didn’t need the property and could easily blow you out of the water if it tickled their fancy.
It’s disconcerting and intimidating. That’s why you actually need to be that person. Be the one that makes everyone else think you mean business…that you’re not there to muck around.
Next, if that’s not you, if you’re not the kind that can feign confidence and you feel like the pressure might all be a little too much, why not get a friend or buyer’s agent bid on your behalf?
This will deflect the stress from you and put your carefully crafted budget in the hands of someone who will not let emotions get in the way of fiscal rationality. Finally, as a little left field tip, try bidding in odd numbers.
If the bidding is going in lots of $10,000 for example, try bidding 11 or 13,000. This can often slow the momentum of the auction while the auctioneer calculates the new total. Even if it’s only a split second or two, changing that pace and momentum can work in your favour.
Finally, remember to stick to your budget, losing the auction is better than overspending and risking a mortgage default.
Tim McIntyre is the senior real estate reporter for the Daily Telegraph and news.com.au
Over the past decade, he has attained widespread knowledge of Australia’s many unique property markets and is an authority on all things buying, selling and investing.
His commentary appears every Saturday in the Daily Telegraph Real Estate lift out, as well as online at news.com.au