Welcome To The World Of Real Estate Auctions.
Ahh, the thrill of the Auction! Nervous Buyers sizing each other up.
An awkwardly awaiting crowd filled with anticipation.
Suited up Real Estate Agents working the room and an Auctioneer orchestrating the show.
Yes, if you didn’t already notice, there’s one distinct thing about the feel of an Auction; it’s a show. A Real Estate selling show that is geared to do ONE thing - Sell property for the highest price possible.
As much as you might think, Auctions really aren’t that scary. If you’ve been to as many as I have, then you will realise there’s a basic formula to it all.
It’s just that many Buyers will only ever buy or bid at an Auction once or twice in their lives, so understandably this formula isn’t obvious to them.
To even get to THIS point though means they’ve had to bite the bullet, get over their fears, jump in, and make that very first bid.
Fear of the unknown is generally what makes Auctions SEEM like the impossible to rookie Bidders, novice Investors and especially the first home Buyers.
Heck, I even know of some very seasoned Real Estate Investors who can’t bear the thought of turning up to an Auction and making a bid! Their nerves just get the better of them.
Many Buyers give Auctions the flick and move onto other properties because they place Auction in the too hard basket.
The truth is, many of the BEST properties are bought at Auction and this is why you ABSOLUTELY must jump in and give Auctions a go if you’re serious about buying Real Estate.
If you can get over the fear of actually bidding at Auction, you are immediately opening yourself up to greater opportunities in the property world, particularly when it comes to investments.
For the Buyers who are fearless to the Auction factor, I commend you for giving it a go. Jumping into an Auction for the first time is certainly not something for the faint hearted. Many of my clients have reiterated to me over the years, “Wendy, if it wasn’t for you, we wouldn’t be here”.
Charging head first into the unknown, especially the Auction process, doesn’t necessarily mean you’ll come out a winner however, and just “giving it a go” doesn’t always equal success (even if you managed to secure the property). Flying blind and winging it is simply NOT the way to approach Auctions.
You see, as much as I believe there is a formula to Auctions, there is also a level of expertise one must acquire to really be successful at Auction and get the very best result or outcome. In my opinion, you just DON’T get this expertise unless you’re bidding at various Auctions, consistently, ALL THE TIME.
The variables can and do change from Auction to Auction depending on the Auctioneer, the selling Agents, who is bidding, the Buyers on the day, current market conditions and even the style of the property. You can never really get a full grip on any one Auction because each can differ immensely.
Reading the play and adjusting your strategy at the flip of a dime (or the call of the Auctioneer) becomes a real skill. As the old saying goes, “practice makes perfect”, so you just have to get yourself out there to acquire this ability.
Time and time again, I see Buyers walk away SEEMINGLY successful (because they’ve made the winning bid), but I know deep down they could have achieved an even BETTER result if they only knew a few basic rules of the game.
So with that said, how do you put yourself in the strongest position possible at an Auction? If you’re reading this, then you’ve obviously been savvy enough to realise some of the variables I’ve described above and how they can disadvantage you as a Buyer if you’re not in the know.
You’re cautious, and I COMPLETELY get it.
You should be.
You’re about to play with hundreds of thousands, heck, maybe millions of dollars in the heat of the Auction moment - This is scary stuff!
I’ll be honest, I truly believe the BEST way to buy property at Auction is to have a third party professional represent you. I know, you’re probably thinking, “yes of course you would say this Wendy, that’s your way of earning a living!”, but let’s be honest for a second - How many stupid or irrational decisions have YOU made under pressure and with emotions mounting?
Add money to the mix, and there’s a ripe old recipe for disaster if you lose your head (which mind you, is incredibly easy to do at an Auction).
The huge benefit of a third party bidding on your behalf is that they are somewhat removed from the emotion of the purchase and can make bids objectively rather than emotionally. Not to mention, it saves you the hassle, time and emotional anguish that is typically attached to the Auction process.
The heat is off when you’re not in the hot seat.
With that said, I also understand that many Buyers WANT to give it a go, bid themselves and maybe tick it off the bucket list of things they’ve done. I get this, and I’m certainly not going to stand in your way if you want to go it alone.
That’s why I’ve written this book so you can go into the bidding circle better equipped and walk away a winner (whether you buy the property or not), knowing you armed yourself with the best possible knowledge and did everything you could do to get the best possible result for yourself on the day.
Sound like a plan?
TABLE OF CONTENTS
WELCOME TO THE WORLD OF REAL ESTATE AUCTIONS
WHAT I’LL TEACH YOU
The Auction Process From Start To Finish
BEFORE AUCTION DAY
STEP 1 - Inspecting The Property
STEP 2 - What To Do At The Inspection
STEP 3 - What To Ask The Agent
STEP 4 - What To Do Following The Inspection
STEP 5 - Preparing The Comparative Market Analysis And Calculating True Market Value
STEP 6 - Request A Formal Valuation
STEP 7 - Financing Your Auction Purchase
STEP 8 - Gauging The Buying Crowd
STEP 9 - Setting Your Buying Limit
STEP 10 - Deciding On Your Auction Bidding Style
STEP 11 - Understanding The Bidder’s Registration Form
STEP 12 - Bidding On Behalf Of Others
GEARING UP FOR GAME DAY
The Big Day Is Almost Here
DAY OF THE AUCTION
Lights, Auctioneer, Action!
STEP 13 - Preparing For The Big Day Ahead
STEP 14 - What To Wear (Dressing For Success)
STEP 15 - When To Arrive
STEP 16 - What To Do At Registration The Contract Of Sale
Conditions Of Sale Title Search Bidders Registered
STEP 17 - Approaching The Auction Team And Dealing With The Agents
STEP 18 - Devising Your Game Plan
STEP 19 - Creating Allies Within The Auction Team
STEP 20 - Power Positioning - Where To Sit Or Stand
STEP 21 - Making A Bid
STEP 22 - Placing A Knockout Bid
STEP 23 - Making Each Bid Count
STEP 24 - Dealing With Competing And Multiple Bidders What Happens If No One Bids?
STEP 25 - Placing The Winning Bid And Securing The Property Some Contract Side Notes
STEP 26 - Contract Follow Up
Is The Property On The Market?
Bidding Against Yourself
COMMON AUCTION TERMINOLOGY - WHAT IT ALL MEANS
What Is The Reserve Price?
What Does It Mean When A Property Is “Passed In”?
What Does It Mean When The Auctioneer Announces A Property Is “On The Market”?
Why Does The Auctioneer Call “Going Once, Going Twice, Going Three Times”?
What Is A “Vendor Bid”?
CONCLUSION - NOW IT’S YOUR TURN