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6 auction strategies real estate agents don’t want you to know

There’s no doubt that auctions can be a bit of a minefield to get through. The nerves and pressures of having to make split-second decisions can quickly turn the bargain you had in mind into a heavy financial burden.

The following buying tips can help you gain an advantage during property auctions, which is why real estate agents often want to keep them a secret.

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1. Know the market value

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Do thorough research on the property you have your eye on to find its true market value. The quickest way to do this is by requesting one of Lendi's Free Property Reports. This estimate looks at recent sales in the area of similar properties.

Ensure you arrive equipped with a value range so that you don’t end up bidding above what the property is actually worth. Remember, one of the advantages of an auction is the potential for a good deal. You will only be able to get one if you are familiar with the market.

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2. Stick to your budget

Many property buyers make their way to auctions with the idea of saving money, but end up spending more than they can afford. Once the thrill of the auction begins, it’s difficult to control the urge of bidding just a little bit more to land the property you really really want.

This where good real estate agents make their profits – you have to make sure you stick to your budget, stay calm, and don’t let adrenaline take over. Before you arrive at the auction house, know your upper limit and stick to it. It's not about winning.

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3. Attend other auctions

paddle-auction We advise potential investors to get an idea of the auctioning process before making a bid themselves, by first taking the time to observe the professionals at work, without the need of immediate involvement and action. You can learn quite a lot just by watching buyers, sellers and auctioneers. This is a vital step as it removes the unfamiliarity of the auction, saving you from making mistakes when making your own bids.

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4. Keep your cards close

When dealing with the real estate agent in charge of an auction it’s important to not be too open with them. It’s the agent’s job to try and get the highest price possible on the property and extracting information from potential buyers is part of the whole process.

When you speak to an estate agent, don’t give away any financial details. This means your budget or how much you think the property is worth. It should all be left a mystery. Don’t be too enthusiastic about a given property, even if it’s your dream home. You don’t want to unintentionally drive the reserve price up.

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5. Ask someone to bid for you

couple-signing For those who think the heat of the auction may be too much to handle, it’s worth asking someone who's been there before to stand in for you. Make sure they are someone you trust and outline exactly where your hard limits lie.

In addition, it removes the emotional aspect from the equation. A stand-in will not be tempted to go over your budget, as there is no attachment to the property in question.

6. Pre-auction negotiations

Many first-time property investors don’t realise that it’s also possible to negotiate on a house pre-auction. If there’s a property you really want, it’s definitely an avenue worth exploring.

Sellers will often be willing to let go of their property pre-auction if the price is acceptable, as it removes the danger of the property passing in at auction and it can speed up the documentation and final sale.

One option is to let the agent know you’re a serious buyer ahead of the actual auction. Come equipped with all the necessary paperwork to drive the sale through quickly. This makes the entire process easier for the seller and can help you seal the deal.

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Tags: first home buyer, property, auction, property value

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