Phone auctions are one of the trusted and suitable ways that many people use to acquire their properties these days.
Everyone has their reasons for using this channel. For example, the bidder may not be in the country at the moment, can’t make it on time to the auction, feels overwhelmed with public bidding, or may have personal issues to sort out.
Whatever your reason is, phone auctions are very much acceptable here in Australia.
With that said, here is a guide to help you win phone auctions.
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Advantages of phone auctions
Phone auctions let you bid at any auction regardless of the distance.
A few reasons why you might want to bid for properties over the phone may include:
- Travel restrictions
- Personal emergencies
- Feeling unwell
- Not being a resident in the area at the moment
Phone auctions also come in handy for most bidders who are shy or nervous in crowds.
This is a more suitable way to get yourself a property in Australia than attending a live public auction.
Risks associated with phone auctions
On the other hand, there are also risks associated with phone auctions.
For instance, if you nominated someone to take your place, the person might have a poor bidding experience, so you are likely not to acquire that property at a low price or even win at all.
You won’t have the chance to feel the competition for the property. You also won’t be able to read the body language of your competitors or get the dynamics of the auction in the arena.
With that said, you are advised to pick someone trustworthy for the auction.
This could be a friend who lives within the area or a realtor who will take your stand. Reminding them about your strategy and limit before the day will help.
How to bid at phone auctions
You should know the auction rules and regulations to follow across various states in Australia.
Some states may require you to register and may also need you to provide proof of identity for having a bidder take your stand.
Research your agents and interview them properly for the task. Handle it exactly like a job interview, asking about their past experiences and monitoring how well you both communicate.
Having strong communication with the agent is very necessary for the success of the phone auction.
These professionals are the ones who give you feedback on the auction, like the techniques other bidders are using, and also advise you on what to do next.
How to win at phone auctions for real estate properties
Now let’s go through useful tips to help you win phone auctions.
1. You should be realistic
The first tip is to make your intentions clear because failure to do so might get you out of view.
As you have made your intention to buy that property, the auctioneer will always remember to get back to you to offer you an opportunity over people waiting in the wings. Also, you should make a strong first bid.
For instance, let’s assume the property is worth a million Australian dollars, and you make the first bid of 400,000 AUD.
That bid would not move any of the other bidders. You are just allowing them to see that you are not a serious bidder, and they wouldn’t have to worry.
Now imagine if you make the first bid of 920,000 AUD? You just made your intentions clear that you are serious about taking that property.
2. Expect a slower auction pace
If the auction is taking place via a zoom meeting, bidders must have been given an invite link to join the auction.
Most bidders may turn off the video feed, but the number of participants cannot be hidden.
The rush and excitement of the auction can still build-up, though the auction may be a bit slower.
The event is more of a conversation, and the person with the current bid will be identified.
Other bidders can shock you with a strong comeback bid and take the auction off the charts, so the same strategies still apply.
In a certain way, bidders will have more time to know and consider their options.
Online bidding comes with a lot of in-room noise because everyone present is registered and considered a serious buyer.
There are usually lots of lookers and excessively curious people in an in-room auction. This isn’t the case in an online auction.
3. Bid with random numbers
The next tip to win an online auction is to bid with random numbers that are above what the auctioneer asked for.
If the bids increase by about 20,000 AUD or 50,000 AUD, everybody can easily follow the bidding sequence, even the online bidders.
But when the auctioneer asks for 700,000 AUD, you can place a 711,000 and a half AUD bid to stand out.
It’s all a game, and you should play wisely. There is psychology here. When you place that bid, you try to take charge and show that you know exactly what you are doing.
Anybody can follow a logical sequence, but only a few can keep up with unusual randomness. The confusion alone could increase doubt in other bidders and may make them stop.
4. Keep on bidding
The next tip here is not to wait for a trial to close (the point where the auctioneer calls first, second, third, and final).
Instead, bid persistently with random amounts as it confuses and discourages other bidders.
The key message is, even if your threshold is a million AUD, bid like your threshold is 2 000,000 AUD and make other bidders think that you are never stopping.
But also, remember not to reduce your bids to a thousand AUD increment because, with that, you are telling other bidders that you are finally reaching your threshold.
For instance, the auction has gone up to 950,000 AUD. As an experienced bidder, you should go right up to a million AUD.
Other bidders will be amazed at how you just bid an extra 50,000 AUD.
5. Ask for available variations
Remember that you can ask the seller pre-auction for the available variations, settlement terms, and deposit methods.
Also, you might ask to see if you can get better terms if there are any available.
If the seller refuses, you have another option to go for, but there’s never harm in asking.
However, you should be mindful of who you take along with. Family members with pure intentions are not of any help if they have little to no idea of what they are doing.
6. Sellers can increase or reduce the asking price
As the auction is online, you should be updated on what the auctioneer is saying and doing.
The seller can always say when it’s right for the property to be on the market and can decrease or increase the price.
If the auction is going pretty well with high biddings, they have the right to tell the auctioneer to increase the asking price.
On the other hand, if the auction isn’t going as planned, the asking price can slightly decrease.
What bidders should understand is that the asking price is just a price; that’s all it is.
It can be reduced or increased depending on how the auction is going, and they are not fixed.
Like our guide on how to win at auctions?
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