5 ways to avoid “auction anxiety”
You’re at an auction hoping to buy your dream home. You’re amongst a bunch of strangers, some of whom are there to try to snatch it from under your nose… The auctioneer opens the bidding… Only one of you can walk away with it. Adrenaline pumping yet?
Australia is one of the world’s leading countries when it comes to selling property by auction as opposed to private treaty – auction is generally how we do it here and it’s not going away. But bidding for a home or investment at an auction can make even experienced buyers nervous.
Overpaying is the number one hurdle buyers face at an auction. They also tell us that the second biggest response is a general fear of knowing how and when to bid in public. And it seems this fear can be traced back to a buyer’s underlying anxiety that they will miss out and be back searching the web next week.
Some buyers are genuinely petrified of bidding in public. And it’s even more daunting for first time buyers. Sydney teacher and first time buyer Isabelle Selwyn says that the toughest part of the process was wondering if she loved the place enough to put all her savings into it. “I kept thinking, maybe something better will come along? If I had to go to auction I’d stress most about knowing how high to bid and when to stop,” she says.
“The easy part was having the right people to guide me – mortgage broker, conveyancer, building inspector. They were all very experienced, which made the tough decisions easier.”
To arm yourself with auction how, here are our top five expert tips. And some of his advice might surprise you as there’s a lot of popular misconceptions out there.
1. Don’t discount communicating with the agent
Prior to auction some buyers don’t want to seem too keen around agents. But in most cases the agents will help you and answer any questions you might have. And if it sells prior to auction you may miss out as a potential buyer.
2. Don’t set just one limit – especially not one that ends in a zero
Don’t set one limit, set two. The first is the ideal limit that you’d like to pay, the second represents your own walk away price. And make sure that doesn’t end in a zero or a five, because that’s what most people do. Odd numbers could get you the property.
3. Don’t be afraid – stand your ground
When you’re bidding don’t let the property go because you’re distracted by the auction process. If you need to, be vocal, speak to the auctioneer or agent. Ask for a minute’s breather, or a chat, to gather your thoughts.
4. Don’t bid small toward the end
Some people will tell you to bring the bidding right down at the end but numbers like five hundred dollars just invites in competition. Five thousand dollars, however, will cause hesitation and that’s what you want.
5. Don’t second guess other bidders
You don’t know what that other bidder’s budget is – and everyone has one. Just focus on your own intent.