The dos and don'ts of preparing to bid at an auction

Yes , the market is exploding. Demand at the moment is huge. Around 250 $1 million plus auctions a couple of weeks ago, that suggests there are around 580 would-be buyers out there hoping to snap up a property before Christmas. These are the ingredients for a very strong property market ahead of us till Christmas.

Does that sound scary? Do you feel like you’re about to miss out?

Well, if you’re a player with a positive the right mental attitude, these market explosions can be happy ones, as long as you regard them with a glass half-full attitude. Why? Because this is a transacting market – one where you can actually buy and sell better than in a down market. There are lots of good properties out there – unlike last year where they were as rare as hens teeth. You just need to be able to identify the one that’s right for you, and know the strategies to be able to buy it.

Remember, even in this market when everything looks expensive– not all homes are the same. Just as in the 2007 market, there is “good expensive” and “bad expensive”. Those that buy the right home now well will be in a far better situation in 2020, than those who snap up just anything hoping to get into the market no matter what.

To those who boast that they bought a home at $200,000 lower than the private sale price all by themselves – with no valuer, no professional advice, no buyer advocate and minimal research – congratulations on buying a home at a price that nobody else wanted in an exploding market.

Buying the right house is not about getting a bargain, it’s about finding a house that is going to suit your family’s needs over the long time. Those who bought well during the last exploding market in 2007 are in a good situation today, confident they could sell their property well if they needed to, but probably not needing to because the house is fulfilling their needs long-term.

So how do you make sure you are the winning bidder on the right house when there are so many others out there chasing the same properties? As we keep pointing out, auction bidding success is not always about who has the most money or the most luck – it is about experience and strategies.

From our recent experience of buying 14 out of the last 18 homes we bid for, and not because our clients miraculously always had the most money, here are our best tips:

Do build relationships

Do get professional advice

Do eat the right foods in the morning and just prior to pass-in late afternoon negotiations

Do understand number psychology

Do recognise that it is possible to buy if your mind is right

The only two don’ts I have for you are:

Don’t buy a home you don’t want (emotionally – life is too short), and

Don’t buy a home that nobody else wants at the price without being fully informed (financially – life is also too short)