Hi everyone,
I am attending an auction in two weeks time to bid on a property which is currently in possession of the bank.
This is my first investment property and have never bid at an auction before.
I was hoping to get some handy hints and some strategic tips on the best way to bid at auction and hopefully purchase the property.
Many thanks!
Tanelle.
grabbing popcorn and subscribing to this……interested in what peoples thoughts/advice is.
BTW seeing no one has answered my only advice is try and bid early with a low price (eg 60% of what you think it will go for) and ALWAYS bid with irregular numbers
eg $435,000 and then 518,000 and then 542,000 eg try to get the auction out of jumping 20k/50k/100k lots etc. A good auctioneer will reject your bid and say only 50k increments at this point….but it puts a stutter into the auction.
The only other advice is that although I recommend being the first bidder (to set the low starting point) and bidding often lower down…..you should then STFU during the middle bids, don’t make any more bids once the auction gets to 80% of your buy price even when it looks like the auctioneer is going to “call it”, and then jump back in very late in the bidding. eg trying for $500 increments
Hi Audsco,
Also because others haven’t yet responded, I wanted to pass on what I believe could be useful. I don’t know, as I don’t spend much time at auctions, nor have I purchased a place that way……I recall a story written by an investing “player” who wanted to snap up a property – he formed his view of value with a walk-thru on the day of the auction. He determined the amount that would be his “highest bid”. During the auction, he had the distinct impression that it was “just him and one more (maybe a “plant” working for the vendor?)
But HERE is the key – the reserve was not reached, and our friend had outbid the “other bidder”. This made him the first one the RE agent came to talk to once the place was passed in”. He ended up buying the place at his final offer price.
And he was offered $40k more before the day was out from someone else wanting to buy it from him.
I thought that might be worth knowing….
Benny
At the Millionaire Mega Conference last weekend, Steve McKnight talked about the “auction bastard” approach. Ask a question like, “Can you confirm that this property contains no deadly asbestos?” That will likely scare off some competition. Otherwise, buying at auction is not ideal as it often tends to favour the vendor.
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This reply was modified 9 years, 6 months ago by
Jason Staggers. -
This reply was modified 9 years, 6 months ago by Jason Staggers.
Jason Staggers | JasonStaggers.com
http://jasonstaggers.com
Email MeI attended a couple of Public Trustee auctions last week and had time to discuss common strategies often encountered at auctions with the auctioneer. I have attended more auctions than I can remember covering many different categories including Property. So here are a couple of tips.
1. ALWAYS attend at least a couple of Property auctions as an observer before you get involved. You will learn a heap, power bidding, lazy/weak bidding, first bid strategies and much more.
2. Establish your maximum bid price and STICK TO IT!!!
3. For many auctions are an emotional rollercoaster, you are an investor (I think) this is business, leave emotions at home!
4. Due you due diligence first, auctions are FINAL, you can’t pull out and get your deposit back.
5. If have a second call and the price is WELL within your limit, reopen the bidding with a jump bid just before the hammer. This unsettles bidders as there is a new player, this is particularly good if you haven’t bid yet as they don’t know your strategy. If the responding bid is weak, say $500, reply immediately with a strong/power bid, I do this with a simple hand bid (don’t worry the auctioneer will be looking straight at you for a response) say 2 fingers meaning $2,000 this often rattles other bidders as you have taken control. The essence at this stage is speed to freeze out competition. You just have to hope there isn’t someone playing the same game.
6. Read (1.) againGood luck
Good advice HiMungus.
Personally i dont like being the center of atention so never bid until bids stall snd it looks like smeone else is going to win. Let them beat it out and thrn jump in. Assuming it is still in my budget of course.
People gt hyped up very easil snd ehen bids come wuick and fast people tend to get wep up snd bid eithout thinking. I was st one auction where it got crazy. One guy had hat you cant beat me atitude and hev went wsy over his budget. He won and was nearly sick when it finally hit him.
Crazy stuff. Dont get into it. Some people play silly games, bidding stupid odd smounts etc but why bother.
Y-
This reply was modified 9 years, 6 months ago by
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