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Most Australians are intimidated by auctions because nobody has taken the time to sit down and explain the process to them. But if you avoid auctions, you could miss good buying opportunities because a lot of vendors will give a discount on the day.
The auction process is the fairest and most transparent way to buy property. Many buyers don’t see it this way – they perceive them as stressful events that lead to spur-of-the-moment emotionally charged decisions.
Benefits for buyers
- You know what the competing offer is at all times, unlike private treaty negotiations
- You get an immediate result – unconditional contracts are signed straight after the auction
- You can see your competition and read their body language
- The price is bench-marked in public – it’s comforting to know others have valued the property the same way
- You have the option to make an offer prior
- You can authorise someone else to bid on your behalf
Benefits for sellers
- Auctions create a transparent forum for committed buyers to battle it out, enabling you to truly flush out the very best price available to you in today’s market
- The competition of an auction naturally heightens buyers’ emotions and their desire to ‘win’
- You get an immediate result
- The normal 3-4 week time-frame of an auction campaign forces buyers to focus and prepare
- You can generally expect a sale within this time-frame – giving you a more secure timeline for your own plans to buy a new home
- A skilled auctioneer can make a big difference to your sale price. They create excitement, confidence and strong competition
Tips for buyers
- If you’re going to bid, have a set strategy
- Be confident – show the other parties, you’re serious
- Make your bids quickly and with purpose
- Call out your offer in full (i.e. say “$450,000” instead of increments like “$10,000”)
- If it’s going to pass in, make sure you are the highest bidder so you get first right to negotiate
- Stick to your walk away price
- If you miss out, accept that it wasn’t meant to be and look forward to finding something better soon
Tips for sellers
- Have confidence in your agent and auctioneer – it’s not their first time
- Choose a realistic reserve price based on market feedback
- On the day, you will be inside listening and/or watching the event. You need to be out of sight so buyers can’t see your reactions
- Have friends and family there to support you
Last piece of advice. Auctions can be really thrilling for both buyers and sellers, so I say get excited and focus on the positives! The adrenaline on the day is electric, so prepare yourself carefully and then let the day bring what it may. Good luck!