Winning Strategy for Auctions

New auction campaigns are launching for properties across Sydney, and competition is fierce due to strong buyer demand. Here are our tips and suggestions for what to do in the lead up to and on auction day. 

Ways you can prepare before an auction

Due diligence
The most important step prior to auction day is conducting due diligence – including professional review of the Contract for Sale, the strata report (if applicable) and building & pest inspection. The nature of an auction means that once that hammer goes down, the agreement is binding. The time for evaluating and making decisions must be before the auction even begins.

Research the area
For the same reason that due diligence is needed for the property itself, ensure that you are familiar with the surrounding neighbourhood and are equally happy with what is on offer. Knowing the local amenities, transport options, school catchments, distance to shops and pending updates to infrastructure can help determine whether it is the right property & area for you. 

Negotiate changes to the contract
Despite common perception, some aspects of auction contracts can be negotiated – but must be done well in advance of the auction itself. Engage a solicitor or conveyancer to go over the contract and negotiate  changes that will become applicable should you win the auction. Ultimately it is up to the vendor to decide what changes they are happy with, but may include a longer settlement period, additional property inclusions, removing clauses or special conditions, or anything else that you consider important.

Get your finances in order
If you require finance for the purchase, gaining pre-approval from your lender is essential before bidding at auction. Knowing exactly the scope and boundaries of what you can afford will determine and shape your strategy. If you win, you will also be required to pay the deposit amount at the conclusion of the auction. Make sure you are prepared and ready to pay.

Know your limits and set clear boundaries
Purchase price is one of the most important factors when buying property. There is often a fine line between investment and return, and over-paying for a property can be dangerous. This is where the help of professionals really comes into its own, including financial advisers to determine the limits of what you can spend, and a buyers agent to give an independent appraisal of the property and its position in the market.

On the day

Avoid a “win at all costs” mindset
The first consideration on auction day is to ensure you do not have a “win at all costs” mindset. Gain a clear and objective understanding of the value of the property to you. 

Be confident
Confidence comes from diligent preparation, knowing your boundaries around purchase price, remaining calm, and focused. This is an area where having a buyers agent bidding for you can give you an edge over the competition – emotions can be removed and they can help you remain within your boundaries.

Allow proper time
Give yourself enough time to arrive early at the auction location, register and sign-in, find a good vantage point, and be settled. The last thing you want to feel is rushed and flustered!

Stay calm during the auction and don’t give anything away
As you approach your upper limit, avoid giving this away with facial expressions or body language. Have a clear goal of how much you are prepared to spend and bid with confidence whilst you are still within that range. At the same time, don’t pretend you are not interested in the property, as this means you may miss out on key information.

Have all parties available to sign
If you win the auction, all parties purchasing the property need to be present to sign the Contract or have the appropriate legal authority granted for someone else present to sign on their behalf. 

Be ready to pay
A deposit will also need to be paid following an auction win, and it is helpful to know which payment methods will be accepted – and ensure you are able to accommodate this.

Defining your strategy
Auction strategy can vary auction to auction, as the conditions will be unique for every property. Defining an auction strategy comes down to asking the right questions beforehand and understanding the possible variables including different bidding styles, recent comparable sales and even the individual auctioneer. 

Key advantages of using Buyers Agent to bid on your behalf

Using a buyers agent to bid on your behalf will give bidders the professional insight and experience to ensure the best outcome.

  1. Realistic appraisal
  2. Removes emotion and anxiety
  3. Truly understand due diligence
  4. Connection/relationship with the selling agent (not playing games)
  5. Professional perspective and market insight

The team at Brady Marcs are experienced, independent real estate professionals who can offer whatever support you require for auctions. Call to us today on 1800 28 77 77 or schedule a time to chat.