A strong opening bid can often work wonders – but you need to be sure of market values and very brave to go through with it. We refer to this strategy as a “slam dunk”.
If buyers are nervous about the market they are going to seek reassurance from other buyers bidding. A knock out bid can be quite useful in these circumstances, as long as you know exactly what the property is worth and are comfortable with what you are prepared to pay.
Timid bidding just leaves the door open for other timid buyers to have a crack.
One of the funniest bidding styles I have seen recently is where each bid was delivered as a question. So the buyer put up their card and said “$5000?”, to which the auctioneer replied “no, $10,000” and the buyer conceded “OK then”.
But bidding strong can have some drawbacks. You may manage to scare off other buyers but you may also encourage the vendor to be unduly high in their price expectations. Also, you could find yourself locking horns with a competitive bidder who just likes to compete for the heck of it and win at all costs. So you have to tread carefully.
Good auctioneers these days are trained to deal with hecklers and arrogant bidders, so the best way to put your stamp on an auction is to be charming and unpredictable.
Most of the time it is true that those with the deepest pockets will end up buying the property but it is not always the case and if you can take control of the auction, or, at least, disrupt the flow, you can have an impact on the overall outcome.
In the unlikely event that all bidders have the same limit, it becomes a race to the finish, as the first one there will get to buy the property.
Finally, there is no point bidding unless a) you have decided that you really want to buy the property and b) you know in advance what the property is worth to you and what price you are prepared to pay. But we see plenty of people bidding who have no clue how to answer either of these questions…
Published: October 2013
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.