Hot Property Auctions: Strategies for Success in a Frenzied Market

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Are you ready to outsmart the competition and secure your dream property in today’s red-hot auction market?

In the competitive world of property auctions, Adrian Gidaro’s recent experience is a stark reminder of homebuyers’ challenges when seeking their dream property. 

The 34-year-old and his partner are determined to upsize from their cozy one-bedroom apartment in Annandale, in Sydney’s vibrant inner west. 

However, they’ve hit a few bumps along the way.

Gidaro’s most recent endeavour took him to a lively auction in Camperdown, where he hoped to secure a new home. 

He kicked off the bidding at a confident $1.1 million, but a fierce battle saw the property selling for a staggering $1.27 million to a seasoned downsizer. 

Reflecting on his defeat, Gidaro, an account manager for a sustainability consulting business, said, “The other party was an older gentleman, and we just hit a point where we knew I wasn’t outbidding him.”

Navigating this fast-paced real estate landscape with skyrocketing prices and fierce competition demands a strategic approach. 

With capital cities now experiencing their busiest auction week since April, it’s crucial to arm yourself with knowledge and tactics.

Cracking the Code: Deciphering Price Guides

One fundamental aspect of auction preparation is understanding the price guide. 

According to buyer’s agent Kellie Landrey of Scoutable in Sydney, real estate agents typically employ the price guide to indicate the lower 10% range of what the seller might accept. 

Landrey advises buyers to add 10% to the price guide as a rule of thumb to avoid falling into the trap of misleading directions.

However, the reality often needs to be revised to this guideline. 

Agents usually begin with a lower guide and gradually increase it during the campaign to attract more bidders. 

The objective? To lure buyers with budgets exceeding 20% to 30% beyond the original range, leveraging those with smaller budgets as competitive pawns.

Agents: Your Inside Source

Gaining an edge in this high-stakes game requires building solid relationships with real estate agents. 

Before auction day, engaging in multiple conversations with the agent can provide crucial insights. 

Landrey recommends inquiring about the number of registered bidders, building and strata report download volume and contract changes. 

These inquiries help identify serious contenders, making it easier to gauge the competition.

Auction Day Strategies: From Confident Bids to Silent Assassins

Come auction day, a well-thought-out strategy is paramount. 

Buyers can opt for two approaches: going significant and early or biding their time as “silent assassins.” 

Brendan Dixon, managing director of Pure Finance, explains that if the bids start to slow and increments reduce, it’s the perfect moment for a well-timed, substantial bid.

Confidence is critical in both strategies, with buyers advised to maintain a game face, keep sunglasses on, and avoid distracting conversations. 

As director of Apollo Auctions, Justin Nickerson suggests that launching the opening bid often leads to success, as seen in most auctions. Quick, assertive bids can also convey confidence and unsettle competitors.

Mind Games and Unique Bids: The Art of the Auction

Auctions often witness unconventional behaviour, but some tactics, like trying to intimidate competitors with intense eye contact, rarely prove effective. Instead, focus on bid amounts: avoid round numbers, as they can lead to unexpected outcomes. 

One memorable instance involved a property selling for $2,001,000 when the other bidder dropped out at $2 million.

Mastering the Auction Lingo

Understanding the rhythm and terminology of auctions is essential. Auctioneers employ “trial closes” to stimulate competition, and specific phrases signal that the property will likely meet the reserve price. 

Buyers can gain an advantage in negotiations by staying informed about the auctioneer’s language.

Pre-Approval and Timing

Getting pre-approval for financing is critical, with timing playing a pivotal role. 

Buyers must ensure their pre-approval remains valid and be prepared to finalise the approval promptly after winning an auction. 

Delays could significantly lead to unexpected complications if interest rates fluctuate during the pre-approval period.

The Final Checklist

Lastly, meticulous due diligence is critical. Seeking professional advice to review contracts, organise strata or building reports, and confirm the property’s condition can prevent post-auction regrets. 

Having the deposit funds readily accessible and understanding the payment options is also vital.

In the cutthroat world of property auctions, arming oneself with knowledge and strategic thinking is paramount. 

As buyers navigate this tumultuous landscape, these insights and tactics can make all the difference in securing that dream home.

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