Bidding at auction, particularly real estate auctions, can be terrifying, especially if you have your heart set on buying the property. Even worse in a hot market when prices are rising almost on a daily basis.
Many buyers, left to their own devices get scared off by aggressive bidders and stop bidding prematurely. Many others get caught up in the adrenalin created by a competitive auction and end up bidding well above their limit. Plenty of people think they have the perfect auction winning strategy and end up shaking their heads as others with their own winning tactics overtake them.
If you find that auctions scare the pants off you, or if you can’t trust yourself to stick to a limit, then it’s probably a good idea to get somebody else to bid for you. Often a confident friend or family member is happy to volunteer. This can be a good thing if they can be trusted to keep a level head. The most important thing here is that you instruct them properly. You need to know in advance of the auction what your maximum bid is going to be. Make sure you have really pushed yourself to your maximum comfort level for that property before setting your limit. It’s no point having regrets after the auction as you won’t get a second chance.
There are numerous benefits to using a buyers agent to bid for you at auction and the most obvious is that you are getting a professional to do the job and taking the emotion out of it. We don’t recommend engaging a buyers agent simply to bid, however, because the devil is in the detail! The most value is gained through having advice on the actual calibre of the property, what it is worth (ie, what your maximum bid should be) and the best strategy. Consider whether it would be better to try to buy it prior to auction rather than go and compete by bidding at auction.
When you are being advised by a buyers agent (as distinct from having a Buyers Agent simply bidding at auction for you) you are going to have a much greater chance of success while also limiting the possibility of paying too much.
Published: 12 Feb, 2015
DISCLAIMER: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.