House auctions are one of the best ways to gain control of high value properties at a deep discount. However, you face steep competition at an auction from people who are also looking to get a great deal. You need to go into battle with a strategy if you are going to win without overpaying. Here are 10 top tips to winning at auction.
Do I have a strategy beachhead?
Well before you hit the auction floor, you should understand the current market. Find out if you are in a seller’s market or a buyer’s market. Research the individual properties and find out how much the market values them and how much you value them. Set your max bids for these properties in stone before heading out.
Should I use a professional bidder?
If you do not have experience with the auction environment, do not be too proud to outsource the bidding to a real estate agent who does. If you get an agent with a good reputation, then you may scare out other bidders strictly on reputation. Be wary of one thing: Agents are paid on commission, so they have a natural inclination to bid up. Set the rules well ahead of time in writing.
Am I bidding at the right time?
You should not place a bid until you have to. If your max bid is an odd number, then you should bid on odd numbers only. Many auction pros say to start bidding low, but most of them believe that starting to bid at around 80 percent of your max bid is the best place to start bidding, especially if the increments are relatively low. This helps to kill the bidders who are trying to steal the deal and gives a signal to other, more serious bidders that you are not to be trifled with.
Do I have my poker face on?
The perfect place in the room is the place that allows you to see everyone’s face while hiding yours. Everyone will be silently jockeying for position, so do the best that you can. The auctioneer will also be watching your face, and he will likely be very good at it.
People can see a world in your eyes. No matter how much you want a property, do not let that gleam come into your eyes. The auctioneer will speed up the action, and you will become a target for other bidders. Keep your poker face on and bid on everything in the same manner.
Am I bidding confidently?
Your body language says more about you than anything else. If you bid in a confident manner, you may scare your rivals out early and save yourself some money. You may also bid the price of a property up in a manner that is outsized to the auctioneer increments. Bidding fast is another cue that weaker bidders will take as a signal to leave. Slowing down the action when you are closer to your max bid may also reduce the heat in an auction, causing other bidders to back out simply because of the lack of energy.
Do I have a strategy for my max bid?
If you set your max bid slightly above a round number, then you may create the room that you need to outbid a rival. Many people stop at benchmark numbers such as $1 million or $750,000, and if your limit is $1.01 million or $760,000, you may win a property that you would have otherwise dropped out of.
Can I scare off bidders?
In many cases, asking the auctioneer a negative question may help you to scare off other bidders. Question the legality of a feature in the house to give people second thoughts and scare them out of the market for the properties that you really want. The negative questioning may also distract bidders and the auctioneer into thinking that you do not want a property that you actually do want.
Do I have a hard limit?
Many top auction strategists actually advise that you write your max bid on your hand. You may even want to tell other people what this bid is, as long as you do not tell other bidders. The thrill of the auction, a thrill that is manipulated by the auctioneer and other bidders, can quickly make you overbid yourself and commit to properties that you did not actually want.
Am I getting advice from the right places?
Unless you have family and friends who are experienced in real estate auction situations, then you should not consult with them at all about it. They will often keep you away from good deals that can make you money. You do not need everyone putting their two cents in if they do not even fully understand your auction strategy.
Do I understand the auctioneer’s tells and signs?
The job of the auctioneer is to provide the rosiest picture of the real estate possible. He wants you to bid up the property no matter what. You should watch the auctioneer for tells that he is reaching for benefits to reach a benchmark price. For instance, an auctioneer who consults with the vendor for a long time, the property is likely less valuable: The discussion is probably about finding a benefit that will cause people to bid more, and you do not always need to take the bait.
2 Point Highlight
If you do not have experience with the auction environment, do not be too proud to outsource the bidding to a real estate agent who does.
Many people stop at benchmark numbers such as $1 million or $750,000, and if your limit is $1.01 million or $760,000, you may win a property that you would have otherwise dropped out of.
