Property auctions are traditionally an open and transparent process, with benefits for both buyers and sellers. But it is important that prospective purchasers are aware that when conducting a property auction, it is the auctioneer's primary job to ensure that the advantages are stacked in favour of the seller in an effort to sell a property at the highest possible price on behalf of their client - the vendor.
Every auctioneer has his or her own traits, with each using their own methods to gain and sustain the interest of their audiences made up of potential bidders. In fact, there are as many different ways of auctioneering properties as there are people who do it.
But there are two general qualifications that almost all property auctioneers have; a quick wit and a ready tongue. So you had better beware if you are thinking of bidding for property at auction!
Before making that crucial bid, make yourself aware of some of the following techniques that can be used by the auctioneer to maximise the price for the vendor.
- Auctioneer's often try to use their charm to persuade, and sometimes even intimidate, bidders into bidding higher amounts. Try to avoid getting sucked in by their charisma.
- You will often find that the auctioneer sets the guide price of the auction property at a relatively low level in an effort to conjure up interest among bidders. This tactic can sometimes result in competitive bidding among buyers, driving the sale price significantly higher in the process. Don't be fooled and don't get carried away with the euphoria in the auction room. Set your budget and stick to it.
- The auctioneer will attempt to control the bidding increments, increasing them as large as possible with each bid. Always try to reduce the size of the auctioneer's increments at the early bidding stages in an effort to secure a cheaper purchase price.
- An auctioneer's conduct on the rostrum will sometimes change, albeit only slightly, when a property being offered for sale reaches its reserve price. Try to identify this pattern of behaviour, with a view to immediately reducing your bidding increments for your desired lot in the knowledge that the property will be sold, but ideally at the cheapest possible price. Try to arrive early on the day of the auction and ideally attend more than one auction to get a feel for how a particular auctioneer works.
- Once an auctioneer knows that you are interested in a lot, he/she will keep a close eye on you, your movements, and may try to engage with you - possibly through humour or otherwise, in an effort to win you over. Look directly at the auctioneer during this period. Your bidding should be confident. But if the price becomes too high, stop the movement and look away from the auctioneer.
- If bidding by phone or online (some auctioneers broadcast live video from auction), it is often necessary to establish your credit with the auctioneer in advance, and may require that you send a cheque to him/her before the auction representing the 10% deposit of the maximum amount that you are willing to bid. Beware when bidding this way that the auctioneer is aware of the maximum that you will pay and he/she may unscrupulously take advantage of this knowledge by increasing the reserve.