Whether you’re bidding for a prized piece of real estate or rare work of art, auction results — on the surface — can be a triumph or travesty.
The outcome should always depend on the financial discrepancy, rather than an emotional attachment.
But how do you navigate the adrenaline-charged auction environment without overpaying, overplaying or missing out?
Stick to the game plan
Preparation is key, so it is important for buyers to devise a game plan while making allowances for incremental changes without overcommitment.
Removing emotion from the equation is primary. If you are unable to bid with a cool head under pressure, enlisting an auction agent, representative or trusted friend ensures you won’t waver from your financial limit.
Do your homework
By researching prices, you’ll discover that most sales normally occur for unusual figures, such as $412,500 or $728,500. With this in mind, set your limit slightly above a round figure (for example, $527,000 rather than $525,000).
In this way, you can eliminate opposition bidders with a minimal increase.
On auction day, arrive at least 30 minutes early and keep an eye on who is examining the contract to determine the volume and calibre of competition.
To a degree, the auctioneer is the director and each bystander has a role to play.
Some industry insiders recommend that serious bidders start with a high bid that will blow the also-rans out of the race. The theory is that doing so eliminates most of the opposition from the outset and proves your purchase commitment.
Others say you should only start bidding when the reserve price is reached, and the property is declared to be “on the market”. Using this method, you won’t declare your hand too early.
Adopting plan B
Another route to avoiding the stress of auction day is to make a prior offer.
Industry research indicates that more than 90 per cent of buyers would prefer not to go to auction — opting to negotiate with the owners if the asking price is made clear.
Regardless of personal success or disappointment, it’s not a matter of winning or losing — but abiding by predetermined limits to achieve your aim.