Six tips for how to prepare and bid at auction

Buying at auction is a great way to expand your options. Auctioneer Champion, Tom Esze, has provided his top tips for how to prepare and bid at auction.

Sjanna Sandalova

Buying at auction can be a great way to expand your options. You may face less competition to buy an auction house compared with buying in the traditional way, but you will also be dealing with a different pool of potential buyers-often, experienced investors, so it is wise to come prepared.

Auctioneer Champion, Tom Esze, has provided his top tips for how to prepare and bid at auction.

1. Do your research

Prior to auction day, ask the agent for all the sales information they have about the suburb from the last 12 months. This will assist you in arriving at a price estimate.

Ensure you have researched the property title, any encumbrances and auction sale agreement.

2. Don't be afraid to get help

If you are feeling nervous about bidding, speak to a property savvy friend or family member to assist, or employ a REIWA buyer's agent to help you with the process.

3. Know your budget

When going into an auction, it's a good idea to come prepared with three prices in mind:

1. Your 'starting' price.
2. Your 'top' price.
3. Your 'stretch' price.

4. Be confident

Be confident in your bidding. If you've ever seen a buyer's agent bid at auction on behalf of a buyer, they usually stand right in the middle of proceedings somewhere between the auctioneer and the crowd. They're bold, full of confidence and they don't hesitate when placing a bid. They look strong and confident in front of their competition.

5. Let the auctioneer know of your interest while auction is live

Contrary to popular belief, there is no mention of a "first right of refusal to the highest bidder at the reserve price should the property be passed-in" anywhere in the REIWA Auction Sale Agreement.

If a property is about to be passed-in, let the auctioneer or agent know of your interest while the auction is 'live' so they can refer it to the seller. The last thing you want is for the property to be passed in when you almost had it and then you are back in a competitive environment with the buyers who can't bid until the auction ends.

6.Compete hard till the end

Near the end of the auction, when the bids are down to $500 rises, that's the time to show strength in the face of your competition and start upping the rises to $1,000, $2,000 or even $5,000 bids.