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GUEST OBSERVATION
With limited stock available for buyers to choose from and the average amount of bidder at an auction still sitting comfortably around two, buyers are likely to be feeling the pressure when it comes to trying to ‘win’ the home they want at auction.
Now, more than ever, strategy is likely to play an even more important role in your success on the day.  Having been involved in over 50 properties for sale this year, our success (or purchase) rate is sitting at almost 90%.
Some buyers may believe professional bidders are more successful just because the buyers they represent have more money.  It would be great if this were true. However, why would someone who is guaranteed to have more money than everybody else need to use a buyer advocate? The fact of the matter is that it is almost impossible to guarantee anyone will have the most money. So maybe it’s not about money, maybe it’s about strategy.
One example is a property bought earlier in the year in <a href="https://www.urban.com.au/property-observer" target="_blank">Hampton</a>.  The strategies resulted in the property being purchased for $102,000 less than the underbidder paid for a near identical home in a lesser street, less than one month later.  There were three parties bidding, yet the underbidders stopped – why?  The first underbidder’s later purchase shows they had more money.  Why did they choose to stop? Was it just they assessed value at a $102,000 difference? Maybe, but probably not? So
<ul>
<li>Was it lack of preparation?</li>
<li>Was it uncertainty?</li>
<li>Was it nervousness?</li>
<li>Was it stress?</li>
<li>Was it inexperience?</li>
</ul>
Nobody knows for sure, all we know is, it wasn’t lack of money.
Some buyers may believe that the next best solution is to just keep bidding. However, this could be a risky strategy if you haven’t done your research on the property’s strengths and weaknesses and values, particularly if you find yourself needing to sell in a market that may not be moving in the same direction as the one we are currently experiencing.
Kristen Hatt is principal buyer advocate at <a class="company-profile-public" href="https://au.linkedin.com/company/james-buyer-advocates?trk=ppro_cprof" target="_blank">James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Weekly auction reports, advice and in-depth market analysis are available on James' website.
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Winning at auction isn't amount having the most money, it's about strategy

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GUEST OBSERVATION
Are you a house buyer, a position buyer or a money buyer?
Knowing the answer to this question before you start searching will help when it comes to the pointy end buying your next home by providing you with clear direction as to why you are doing what you are doing and potentially help understand the risks versus the rewards.
A focused mind is far more likely to stick to the plan than one that is fraught with unanswered questions.
How do you know what sort of buyer you are?
Answering these questions may provide some insight:
<ul>
<li>Are you attracted to homes with a pretty façade?</li>
<li>Are you attracted to homes with the most current fixtures, fittings and colours?</li>
<li>Is it essential that you can walk to the station?</li>
<li>Do you mind if there are flats or townhouses in your street?</li>
<li>Are you looking for neighbours who are at a similar stage in life to you?</li>
<li>Do the <a class="st_tag internal_tag" href="https://marketnews.com.au/tag/children/" title="Posts tagged with Children" rel="tag">children</a> need to walk to school?</li>
<li>Do you only like <a class="st_tag internal_tag" href="https://marketnews.com.au/tag/new-homes/" title="Posts tagged with New Homes" rel="tag">new homes</a>?</li>
<li>Is it more important to be close to the shops on a busy road, or further away on a quiet road?</li>
</ul>
A house buyer is a buyer focused on what is inside the boundary of the <a class="st_tag internal_tag" href="https://marketnews.com.au/tag/property/" title="Posts tagged with Property" rel="tag">property</a>. The house, the flow, the condition, the style, the garden, the spaces etc.
A position buyer is a buyer who may be prepared to compromise on the house for a location that meets their needs – i.e. within 500 metres of the beach, shops, station, schools and transport.
A money buyer can be someone who only wants to buy something that is perceived to be cheap, however, it may also be someone who is focused on financial growth and outcomes.
Many buyers are a combination of all three, however, unless they have a lot of flexibility with their budget, for many the house may be more important than the position or vica versa.
It is important to clarify what type of buyer you are before you start searching as there may be risks emotionally and financially if you are unclear. You may find yourself purchasing a home that doesn’t work, potentially resulting in the need to move or renovate which can be both emotionally and financially challenging.
Buyers may also wish to consider what type of buyer they may be up against at auction. Understanding the competition and having an appropriate strategy planned before the day will help you achieve your goals.
If you are unprepared before you enter negotiations to buy your next home, it may stop you from doing what needs to be done to achieve your goals.
Kristen Hatt is principal buyer advocate at <a class="company-profile-public" href="https://au.linkedin.com/company/james-buyer-advocates?trk=ppro_cprof" target="_blank" style="line-height: 1.3em;">James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Weekly auction reports, advice and in-depth market analysis are available on James' website.
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Kristen Hatt

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