Why Phone Bidders Are The Biggest Losers At Auction
The in-room auctions at Place Estate Agents in East Brisbane are certainly an exciting experience.
Last Thursday night Place’s chief auctioneer and my good friend and colleague Peter Burgin put on a great show for the packed house of eager bidders and on lookers wanting a piece of the action that is the Brisbane property market.
I WAS NOT BIDDING ON THIS OCCASION AND TOOK THE OPPORTUNITY TO SIMPLY OBSERVE THE CROWD, PARTICULARLY THOSE WHO WERE BIDDING.
For first home buyers and first time bidders, going to auctions is a great way to ease yourself into the swing of things so that when the time comes for you to buy, you’re a little more prepared than the average punter who just rocks up on the day and has never set foot in an auction room before.
What amazed me on Thursday and what continues to shock me is the number of buyers who choose to bid over the phone.
Obviously these buyers can’t make it to the auction and their only way to get in on the action is to do it via the phone, with (usually a sales agent) bidding on their behalf.
WHAT A DANGEROUS WAY TO BUY PROPERTY!
Not only that, how nerve wracking and stressful it must be for the buyer on the other end of the line with no sense of what is going on in the room and no way to do what is the most important thing you as a bidder should be doing - reading the play.
AT AUCTIONS, PHONE BIDDERS PUT THEMSELVES AT A HUGE DISADVANTAGE.
When I bid for a client, my number one rule is no live phone conversation during the auction. I simply won’t have a client on the other end of the line mid way through an auction because it puts us at a huge disadvantage and can very easily cost my client a great result.
One that I’m striving to achieve for them.
This means we need to agree on a strategy pre-auction so there’s no room for last minute decisions that can be made on a whim using emotion rather than strategy.
Decisions that can all too easily be made over the phone with no sense of what is right or wrong and immediately reveal the buyer’s position, leaving them open to an experienced bidder who could blow them out of the water.
SO WHAT SHOULD A BUYER DO IF THEY CAN'T ATTEND THE AUCTION?
If a buyer is interstate, overseas or simply can’t be present on the day of the auction, the best action they can take is to appoint a third party bidder who has their best interests at heart. Someone who is independent to the real estate agents and auctioneer.
This person could be an experienced friend or for a much better result, an experienced Auction Strategist or Buyer's Agent. Sure, you might have to pay them, but I can almost guarantee the result will be what you want.
YOU'LL EITHER GET THE PROPERTY OR YOU WON'T BE THE ONE WALKING AWAY WONDERING WHETHER YOU PAID TOO MUCH.
Buyers need to be aware that as much as a sales agent has a responsibility to help a buyer bid at auction, their duty of care remains with their seller.
To help buyers bid at Auction, I've written a book which outlines the step by step process and how to put yourself in the best position possible, post, pre and during the auction.
You can download it below, OR CLICK HERE TO READ CHAPTER 1.