Being at an auction is exciting and tense since you need to decide fast, and things can take a wrong turn immediately. Not to mention, competitive buyers are always ready to take everyone down. Some auctions even have fake buyers to increase the bid and change the mood. For these reasons, you may want to know how to bid at an auction in Australia.
If you have decided to buy a property in an auction, you must be ready to make wise and quick decisions. If you go there with preparation, you can bid more confidently and have a higher chance of winning the auction. Here are some tips and tricks for bidding at an auction in Australia.
Every bidder should be informed! If you’re considering participating in an Australian auction, it’s crucial to understand the role of the vendor’s bid.
Further Reading: Wondering about the repercussions of finance not coming through post-auction? Dive deep into our article on What Happens If Finance Falls Through After Auction to understand the process and its consequences.
Tips on how to bid at an auction in Australia
1. Shortlist many properties instead of one
House auctions are fast-paced, and anyone can make a quick and more significant bid than your limits. So, if you only have one property in your mind, you’ll come home empty-handed. On the other hand, who knows, another property might be at a lower rate than usual, and you’ll miss it.
So, before visiting an auction process, check multiple properties, and their details and shortlist at least four to five properties. Once you know about the properties, take out some time and pay them a visit for pest and building inspections.
2. Set maximum and minimum price
Instead of setting a maximum limit, you should select a range and see which properties lie in them. That way, you’ll have more options since multiple properties can lie in your budget range. Never pay above the range, but if you get a suitable property below your range.
Always check your reserve price before making another bid. You can also meet a real estate agent and learn better about the property’s prices and set a range accordingly.
Expand Your Knowledge: While this article gives a solid overview, we recommend reading our article on how to find out the reserve price at an auction for a more in-depth look into the subject.
Set your sights on that next property? Be prepared and learn how to pay deposit at an auction to seal the deal.
3. Follow property professionals
Just as you’re soaking in these insights, complement your understanding by reading our comprehensive piece on how to win at an auction. Trust us, it’s worth the read!Another good idea is to follow property professionals, especially those actively participating in the bidding. They have a better idea of the bidding process and what properties are available in the auction.
If you have a good idea about the properties on sale, you can set your budget accordingly. You can also learn about vendor bids to increase your experience in bidding. Talk to a selling agent and get some advice before going.
Confused about auction results? Our detailed article explains exactly what does passed in at auction mean in the real estate world.
Dive Deeper: While this topic offers a lot of insights, there’s always room to know more. Get a complete understanding of the auction bid process in our detailed guide. It perfectly complements this read!
4. Place a strong opening bid
You can mark your presence by placing the first purchase price as solid. This will give you an advantage over your competitors as they’ll have to think twice before putting in a more significant bid. However, only do this for the properties you are most interested in.
The idea is to win the best property so you can utilise it for more profit or value. One way is to make your starting bid a million dollars if you believe the property is worth it.
Just as you’re soaking in these insights, complement your understanding by reading our comprehensive piece on how to win at an auction. Trust us, it’s worth the read!
5. Place an odd-numbered bid
If you have already placed an initial solid bid and someone has set a higher number, it is time to put an odd number to make other bidders rethink before deciding.
For example, if you placed a million-dollar starting bid and your next bid is only $50,000 higher, other bidders might not significantly increase the price. This allows you to use your final bid as a trump card to win the property.
Enhance Your Approach: Real estate strategies are multifaceted. If you’re pondering early bids, delve into our analysis of making an offer before the auction to equip yourself with the right knowledge.
6. Attend open house auctions
It would be better to attend the open house auctions since they won’t stop anyone from attending. That’ll give you a good idea of bidding and what to expect. If you don’t want anyone to know about you, act as a buyer’s agent and don’t show interest in anything but only learn about the process.
7. Monitor recent sales until the auction day
Check out similar properties in your area and see their sales at any recent auction. You’ll get a better idea of the property’s market value. The best is to find all the auctions in the past six years. Since property rates are changing fast, you never know what starting rate you’ll get at an auction.
8. Do a final inspection
Before you decide to buy a home in Australia, it is better to double-check everything. This also includes the research done for bidding and the auction company, and the auction rules.
Even if you are attending an online session, it is advisable that you review your finances, your bidding range, what you want to buy, and how many properties you like. Also, check out the property market before finalising everything.
9. Register before the auction
It is typically mandatory in Australia to register before an auction; however, some open auctions might not set this condition. Sometimes you get an invite to a private sale, but in some, you can register and enter.
The auction company gives all the registered members a number they can raise and bid. Once the bidding is done, you can collect your assets using that number. Also, check about the home loan pre-approval before visiting an auction.
On the subject of location, remember that auction rules in NSW might be a little different from auction rules in VIC or any other state. Do your research first!
10. Stay active during the whole bidding process
Remember, everyone will pay attention to you if you make an odd bid. Stay confident, make an impression like you own the bid, and know precisely what you are doing.
It would help if you kept playing with your competitor’s mind to stay the highest bidder throughout the process. You’ll see making a vendor bid only to increase the price, so don’t fall for their trick.
More on how to bid at auction in Australia
How to buy auction property in Australia?
Here are the steps on how to buy auction property in Australia:
- Do your research and make sure you know the market value of the property you are interested in.
- Get pre-approved for a loan so you know how much you can afford to bid.
- Attend the inspection of the property and make sure you are happy with the condition.
- Register to bid at the auction. You will need to provide identification and proof of funds.
- Be prepared to act quickly and decisively. The bidding can go up very quickly, so you need to be ready to make your offer.
- Don’t be afraid to negotiate. If you are the highest bidder, you can try to negotiate a lower price with the seller.
What’s Super Saturday?
Super Saturday in real estate is a term used in the Australian real estate market to describe a day when a large number of properties are scheduled to be auctioned. This typically happens in the spring and autumn months, when there is a higher demand for property.
How is bidding done at auction?
Here are the steps on how bidding is done at auction:
- The auctioneer will start the bidding at a low price.
- Bidders will raise their hands or nod their heads to indicate their bids.
- The auctioneer will announce the highest bid and continue to raise the price until there is no more bidding.
- The property is sold to the highest bidder.
What do I need to bid at an auction in NSW?
Here are the things you need to bid at an auction in NSW:
- Identification
- Proof of funds
- Bidding number
You can get a bidding number from the auctioneer at the auction. You will need to show your identification and proof of funds when you get your bidding number.
Here are some additional tips for bidding at auction:
- Be prepared to walk away. If you are not happy with the price, don’t be afraid to walk away from the auction.
- Don’t get caught up in the excitement of the bidding. It is important to stay calm and make rational decisions.
- Don’t bid more than you can afford. It is important to set a budget before you start bidding.
