Bidding at Auction

With so much confusing publicity about changes to auction rules in recent times, below are some valuable guidelines that will assist you in planning your strategy when it comes to bidding at a Maxwell and Co Auction.

You need to bid in order to buy

It is advisable for you to bid during the Auction to indicate your interest in the property. Once a property has been declared “on the market”, the highest bidder will be the winner of the auction unless someone else places a higher bid before the auctioneer calls “sold”.

If, however, the bidding does not reach the vendor’s reserve price, the property will then be “passed in”. In this case, the open competition of the auction is then lost and the highest bidder will be offered the property at the vendor’s reserve price. You must be the highest bidder to have this right so as to be “in the driver’s seat”.

If you are not the highest bidder, you may not get the opportunity to negotiate at all as the auctioneer has total discretion to sell the property to someone else without referring to you at all. This is why letting the auctioneer know of your interest by bidding is so important.

We’ve got some more handy hints here too, to make sure you’re fully prepared when it comes to bidding for your dream home.

If a vendor bid is used it will be clearly stated as that

The auctioneer has the right to place bids on behalf of the vendor. This will only occur if you and the other bidders choose not to bid, and will only take place at a level clearly UNDER the figure at which the vendor will consider selling. N.B. Each vendor bid will be clearly declared as that by the Auctioneer.

Do Your Homework

When it comes to buying property, there's no such thing as too much research. Speak to agents who know the area, find out what similar properties have sold for and explore the neighbourhood thoroughly. That way, when the time comes to bid, you know exactly what you're bidding for.

Get Out and About

It pays to attend as many auctions as possible before you start bidding. Watch how different auctioneers behave, and study the tactics of individual bidders. Not only will this give you some ideas on how to bid yourself, but also you never know when one of these auctioneers or bidders might be at the auction of the property you want to buy!

Work out your own limit

It is important that you set your own bidding limit. Decide what the property is worth to you, (not someone else), and having allowed a margin of perhaps 5 to 10 %, try to stick to it.

Never stop on an even number

Wherever possible, it pays to set an uneven limit, rather than stopping on a round number. For example, rather than stopping at $450,000, try going to $453,000. You may get a pleasant surprise as one bid can make the difference between getting the property of your dreams, or missing out on it.

Ask for help

Don't be afraid to ask a friend, relative or real estate agent, to assist you with your bidding. Many people ask someone else to bid on their behalf as they may be less inclined to bid emotionally and to stick to a predetermined limit. An adviser's experience can be an important asset on auction day. However, if they are going to bid for you, you need to make sure that they have very clear instructions on what they can and can't do on your behalf in order to avoid any mis-understandings in the heat of the moment.