Agents’ Guide to Surviving an Auction

Seasoned sellers spill the beans on how to leave an auction smiling.

Most of us know how emotion-charged home auctions can be. The stakes are high; both buyers and sellers have a whole lot of coin at stake.

Fortunately, there are umpteen ‘how to’ bid guides based on the expert views of buyer’s advocates, hardcore investors, consumer watchdogs and lenders.

But what about agents themselves – surely they know a thing or two about navigating a housing auction?

We shirt-front agents across Australia, demanding they reveal their best tips on how to survive an auction.

Read more: Terms to know before the hammer falls

More knowledge, less nerves

Hugh Bateman, Principal of The Property Shop in Mudgee, says it is crucial everyone attending a home auction has done their homework. This includes agents themselves but is also relevant to buyers and to vendors.

Things to crunch include:

– The property’s history;
– Its features and the features of the local area;
– The market value of the property;
– The price range of similar properties recently sold;
– If you are a bidder, know your limit;
– If you plan to bid, make sure your deposit is ready.

The NSW auctioneer, who started his business in 1973, estimates he has sold 100s of 1000s of lots with his auctioneer’s hammer, including up to 110 lots per hour at some farm clearing sales.

“The most important thing is make sure all of your homework is done, completely done, so you enter the auction room fully prepared for every possible thing that can go right or wrong,” Bateman says.

“If you are confident, you can bid with confidence; the one thing that auctioneers can read quickly is good body signals.

“If you feel nervous or even if you don’t, stand to the side or the rear so you can observe at all time what is going on with the other bidders. This helps you ‘size up’ your competition.”

Never drink & buy

“Absolutely do not drink alcohol before an auction is complete,” Bateman advises.

“Definitely not, it is a big no-no, there will be plenty of time afterwards to celebrate or commiserate.”

To survive an auction in the best possible shape – hopefully a happy vendor who has just sold for a good price or a joyful buyer who has just bought a desired property – you will need clarity of thought and sharp mental reflexes.

Refrain from eating or drinking anything that may inhibit these faculties, Bateman stresses.

“I see it sometimes where people arrive but are not really ready, they are distracted; make sure you turn up on the day fully ready to concentrate.”

To survive an auction in the best possible shape you need clarity of thought and sharp mental reflexes.

Read more: 7 first home buyer mistakes

Befriend local agents before the big day

Selling agents often suffer an image problem in the eyes of prospective buyers. But the fact is picking their brains in the months leading up to home auctions can render valuable insights for both vendors and bidders, according to Perth agent Mark Hales of Harcourts Central.

If you are a buyer, fostering relationships ‘with the enemy’ can mean you learn of new listings ahead of their auction campaigns.

“Talking to agents helps you find out what is happening in the local market and the level of interest in any particular property, all of which can help you on auction day,” Hales says.

Fostering relationships ‘with the enemy’ can mean you learn of new listings ahead of their auction campaigns.

Stay within your budget

Believe it or not, real estate agents do not want you to spend more than you can afford.

“Honestly, it is a lose-lose-lose situation when a buyer over-reaches and cannot cover the balance of the purchase price,” Hales says.

“You lose out because you are up for penalties if you have to break the contract before settlement, the vendor loses the sale and the agent misses commission and has to find another buyer.

“It is costly and messy if you put down a deposit and cannot cover the balance; don’t do it. Stick to your limits.”

Read more: Legal checklist for buying property

Big ego flags big prices

Victorian agent Craig Bennie has called a few hundred home auctions and witnessed more than 1000.

He knows a big buying ego when he sees one. And it can be the difference between a fair price and a premium price.

“Sometimes egos can get the better of buyers,” the Director/Principal of Ray White Rosebud says. “Or you’ll see a partner giving a subtle nudge to a spouse to bid again.”

Another trigger for runaway prices in the heat of a public auction is when buyers have the money available, and there is emotional attachment.

“They definitely can pay more than they expected too, so my tips are stay calm and always stick to your limit.”