Buying a Home at Auction - Any Tips?

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  altomic on 10/02/2017 - 09:46

  +1

  Bikies

  • 

    littlemisslovely on 10/02/2017 - 10:24

    haha.. love ozbargain bikies

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  Gunther on 10/02/2017 - 09:50

  +3

  God damn Sydney is expensive!

  Sorry Ive got nothing else to add #QLD

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  oscargamer on 10/02/2017 - 09:57

  once it's on the market, bid what you can afford

  until it's on the market, do nothing

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  LaProblematique on 10/02/2017 - 09:58

  +1

  When are they going to crack down on overseas/ international buyers? :(

  • 

    [Deactivated] on 10/02/2017 - 10:55

    never, the politicians need these people to still exist when they want to sell their houses. if prices were more affordable they wouldn't make as much money.

    • 

      monharb on 11/02/2017 - 09:48

      Are they overseas buyers or are they immigrants? I thought foreign buyers were only allowed to buy new properties, if they are permanent residents or citizens, they have as much right as you.

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  humdingaling on 10/02/2017 - 09:59

  good luck

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  oscargamer on 10/02/2017 - 10:03

  +1

  since you love to use the word, please learn how to spell Hypothetical

  • 

    littlemisslovely on 10/02/2017 - 10:25

    Thank You! Thought it looked wrong. Now fixed :)

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  garetz on 10/02/2017 - 10:14

  +1

  First make a limit and dont go above that limit. Let the potential buyers bid till people stop bidding, and just before the auctioneer sais the auction is over, bid the minimum amount you can.

  The auctioneer will go back to the vender and confirm with them if its on the market or not, that usually means it hit the reserve or not. They will then allow anyone else to bid again, if you are outbid then you need to consider the increments of every bid previously. Determine what bid will stop other potential bidders from bidding again.

  It comes down to alot of tells, look at the faces people make when they bid, sometimes they have ticks or twitches or make disgusted faces. You can get alot of information on what their ceiling is or if they are willing to outbid you no matter the price.

  The more information you have before the auction the better, know the price history of the property, look at the suburbs data on as many metrics as you can.

  Bidding on auctions is a skill, the more experience you have the better you will be at it. You can also use psychology to your advantage.

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  Jnr202 on 10/02/2017 - 10:15

  +3

  Advertised at $1.1 to $1.3. expect the reserve to be at leave $1.5

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  ZippyRoo on 10/02/2017 - 10:22

  +7

  Most important tip is to stay calm. Ask among your friends and family and get someone who has good negotiation skills and who's done these sorts of things in the past to go with you. Anyone working in sales will be extremely beneficial. Other tips:

  1. There's no need to bid at the start. People who are genuinely interested and who have the financial abilities to pay for the property will only come out towards the end. It will just mentally tire you out if you start bidding too early.

  2. Don't put in a counter bid immediately. This is a mistake a lot of people make, this will show that you're eager and give the real estate agent the advantage in knowing that they have interested parties and they can drive the price higher. Just shake your head, say that it's out of your budget, they will send an agent to stand next to you and keep on pressuring you and they'll wait anyway, so drag it out a little.

  3. Don't bid big increments. If another person also really want the property, they'll put in a counter bid anyway, bidding on big increments will make you reach your limit too quickly and once again, it gives the agent the knowledge that you have money to spend. Play the game and offer 1k increments or maybe even lower.

  4. Going to other auctions first is definitely useful, but keep an open mind and remember that every auction is different. Read every online article you can find and ask every single friend/relative/contacts you have. My hubby did a lot of research when we went to auction for our place in Feb last year. I was pretty much hyperventilating the whole time through but he remained calm and played the game. My mum reckons it's because we're Chinese so we intimated a lot of people out even before the auction started. So on another note, maybe find some Asian/Chinese friends and get the gang to go along to beef up your presence.

  Good luck!!!

  • 

    littlemisslovely on 10/02/2017 - 10:27

    +1

    thank you so much! Great tips.

  • 

    lainey13 on 11/02/2017 - 22:56

    I see a market now to hire out my face to scare people at auctions :)

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  littlemisslovely on 10/02/2017 - 10:26

  Thanks everyone you are all so awesome!

  Do people just ask mid auction if the property is 'on the market'?

  • 

    ZippyRoo on 10/02/2017 - 10:29

    Yep definitely. The auctioneer usually tells you as well once the property is on the market.

    • 

      Skramit on 10/02/2017 - 10:37

      +1

      A lot (in Melb anyway) are very cagey when you ask. Can be frustrating.

      • 

        Chumpmaster on 10/02/2017 - 12:07

        Agreed, seems like most of them want to go as high as they can, before revealing if the house is on the market. Maybe to inflate the perceived reserve price

  • 

    Sweetnsour on 11/02/2017 - 18:15

    Yes. But auctioneer has no obligation to tell you. Before auction, speak with auctioneer and ask if he does announce it.

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  SnoozeAndLose on 10/02/2017 - 10:47

  +1

  I did once and just hide in the middle of crown, also you will need trying to hire the bidding paper, be there first and register you name so not many people know you are going to bid.

  You want to be the last bidder, let all people bid first and when you feel it should be the last bid(last few bid), then you show up and prepared to pay 10K more if it is already bid down to 2K each bid. This way the other bidder may back off as they think why you still go with 10K when it is 2K bid.

  if you knew that you are not going to win just clam down and let it go, emotion always make you over paid.

  • 

    Sweetnsour on 11/02/2017 - 18:18

    Exactly. Keep emotions out of it. Expect that another family or couple want it just as eager as you. I've seen many auctioned at way over market price because they've fallen in love with the home. Only winner is the agent

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  kpyam2000 on 10/02/2017 - 10:54

  Stand near the auctioneer so that he can see you

  • 

    SnoozeAndLose on 10/02/2017 - 10:55

    auctioneer can see everyone in the action, why need to stand next to him ?

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  kolorijo on 10/02/2017 - 11:13

  Good luck!! Hope you get it for a bargain price :)

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  sriracha on 10/02/2017 - 11:17

  +2

  When the bid reaches your limit you set before the auction, remind yourself that this is your dream home and is worth the extra 100k over the 10 years you expect to live there! Put another bid in.

  /\ may seem obvious but that will 100% come to your head in the heat of the auction. Dont do it! there are plenty of good homes out there

  • 

    humdingaling on 10/02/2017 - 13:10

    Spoken like a true real estate agent

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  [Deactivated] on 10/02/2017 - 11:39

  +1

  ask the real estate would they accept a pre auction price and put in an offer.

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  bighead on 10/02/2017 - 11:41

  Bid with Confidence.

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  slow on 10/02/2017 - 12:07

  having attending a lot of auctions, bid at quiet a few and bought a couple of houses at auction I would wait until as late as possible, until after they have been in to "check with the vendor". Bid in as small increments as possible in a confident but nonchalant way (as if you are at old hand at auctions and are mildly annoyed that people are bidding against you and will keep bidding forever). I would also not get buddy buddy and telegraph your intentions to the agent before, certainly don't tell them what your limit is - something I have known people to do!

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  Oofy Doofy on 10/02/2017 - 12:08

  Tell em' they're dreaming.

  Only hot tip I have for you is to offer less than a 10% deposit for you to become a registered bidder (this is at the vendor's discretion). See if they'll take 10k or less. If you get it checked out following a win at auction and it turns out to have problems you did not forsee, you can bail legally and only lose your small deposit.

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  Scandrew on 10/02/2017 - 12:22

  bid with your head, not your heart.

  plenty of fish in the sea.

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  Sheila Dealer on 10/02/2017 - 12:53

  What about employing a buyer's agent to bid for you?

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  Rumbaar on 10/02/2017 - 13:04

  Try having a proxy to bid on your behalf, as this helps to take the emotion out of the process. Which they play on, to try and ensure people bid higher than they want too/should. Also a professional can help slow the pace and reduce the increments, that the auctioneer will try to maintain fast and high.

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  ihbh on 10/02/2017 - 13:43

  How much are you prepared to pay for the property?

  Make that offer (with 10% deposit cheque attached and signed cooling off period waiver) to the seller via the agent and you might win the property without having to go to auction. The risk is that the under bidder might have spent a lot less than you if the property went to auction.

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  StuffnStuff on 11/02/2017 - 08:13

  Unlike a normal Auction where speed is important so they can sell the next item, a property auction runs a lot slower so there is no need to hurry. The auctioneer will keep bidding open until they have the absolute highest bid. The scum bag agents will be running around trying to push bidders up and will apply pressure for you to bid higher. Unlikely in Sydney but if you are the highest bidder and the reserve has not been met, stand your ground and bid no further. You can then negotiate after the auction ends as then the agent will be working the seller telling them that their expectations are too high and they need to drop the price. If there a re no opening bids be cheeky and bid something really low like 500K, then stand back bid no more until the end. Know your absolute limit, do not be pressured by the agent, do not reveal to the agent your limit. Remember its a binding agreement so if you can only afford 1.2M but goto 1.3M because of emotional bidding you cannot back out. Remember you have stamp duty to add to the winning price. Good luck and have fun.

  • 

    HeWhoKnows on 11/02/2017 - 21:47

    All good except advice not to bid higher if reserve has not been met. Sometimes a higher bid will be enough for the vendor to put the place on the market and you have the highest bid by quite a margin. Happened to me and I got the place well below what I thought it was worth,

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  HeWhoKnows on 11/02/2017 - 21:42

  RULE 1. have a limit
  RULE 2. Stick to your limit.
  RULE 3. wait till the auctioneer says "Its on the market" or "we are selling today"
  RULE 4. Bid once only just when everyone thinks its all over and make it a decent bid to blow the other bidders away. Something like a $10K bid when they are bidding 1s and 2s. Seriously the best strategy. By the time the other bidders re-gather their thoughts the hammer has gone down 3 times already.
  Just to put things into perspective i have bought 2 properties with just 1 bid and they were great buys!
  RULE 5. Dont bid if the price has gone over your limit.
  RULE 6. Dont set your heart on any one property. Best way to failure. Have an open mind.
  RULE 7. Do your calculations based on the rental yield. Work on 5% and the highest bid. So a place renting for $400pw should only sell for $400,000. $350pw - $350,000. easy peasy. Avoid anything under 4.5% yield as its getting way too expensive. Long term averges are around 6%

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  HeWhoKnows on 11/02/2017 - 21:51

  QUOTE
  Say for instance the house is advertised at a hypothetical $1-$1.3m (I live in Sydney).
  The house is 'worth' $1.2m (had a valuation and looked at recent property sales)

  Highly unlikely. If they say $1M to $1.3M expect it to sell for $1.4M to $1.5M if there is plenty of interest. Price guide is based on recent sales. Not on what that particular property will sell for on the day.
  Anyway Stick to YOUR valuation. Dont pay any more!

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  littlemisslovely on 12/02/2017 - 08:45

  Great advice. Thank you so much 😊

  I went to watch 4 auctions yesterday and feel so much more empowered after reading your tips and seeing one in action. It certainly is a confidence thing - the two places that sold (2 passed in) were bid by very very confident and cool bidders.

  Thanks again!

  • 

    Sex on 17/02/2017 - 09:01

    So how did the auction go? :)

    • 

      littlemisslovely on 17/02/2017 - 23:01

      +1

      On tomorrow - I'll know in 24 hours and report back :)

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  chumlee on 12/02/2017 - 09:10

  +1

  If you really want it go all in and buy it. If you act like a girlie man you will miss out and pay more in 6 months time.

  Whatever you decide, just don't set your limit at a round number. Too many people set their limit at $1M, $1.1M, $1.2M etc and one or two more bids wins it. Set your limit at $1.58M for example

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  littlemisslovely on 19/02/2017 - 21:49

  +2

  Thanks everyone… We got it!!!!

  Waited till 2nd call then stayed with $10K bids when others were down to $5K. We kept bidding quickly with every return bid and before we knew it we had it.

  Thank you all so much for your insights and advice :)

  • 

    littlemisslovely on 19/02/2017 - 21:50

    The bikkies we ordered out the front helped too… haha just joking!

  • 

    HeWhoKnows on 20/02/2017 - 16:13

    -2

    Sounds like you took my advice :)

    • 

      [Deactivated] on 21/02/2017 - 23:34

      You didn't take mine though.

      • 

        HeWhoKnows on 26/02/2017 - 10:37

        -2

        Not all advice is worth taking.

      • 

        [Deactivated] on 26/02/2017 - 11:22

        @Amayzingone: The irony. Please redress your mistakes in the automatic transmission thread as evidence of this.