While it may all come down to who has the deepest pockets on the day, sometimes how you bid will influence just how high the other bidders are prepared to go. However, the most important factor with a real estate auction is to decide what is your realistic limit in advance. Be prepared to be a little flexible, but don’t allow yourself to get carried away with emotion.
Here are First National’s tips:
- Obtain pre-approval for your loan before the auction. This provides you with confidence that the bank will support your highest bid
- Some people like to enter the bidding early and then keep bidding strongly in the hope that other buyers will find their tenacity off-putting
- Some buyers like to open the bidding with a very high bid but this can risk paying too much for the property.
Others prefer to wait until the bidding appears to be exhausted, before starting to compete
- If two bidders keep upping their bids by similar amounts, some buyers believe it is advantageous to suddenly bid with a stronger, larger increase than has been generally taking place throughout the auction. This is thought to convince competitors that you are determined to succeed and will just keep bidding
- If the auctioneer indicates that the property is to be ‘passed in’, make sure that you are the highest bidder if you wish to have the ‘first right of refusal’ following the auction. This means you will be first to have the opportunity to negotiate with the vendor
Whatever your style, the one thing that rarely works to anybody’s benefit is being loud and obnoxious. Other bidders sometimes say they are prepared to pay much more to make sure that somebody that is rude does not get their way.