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How to navigate the unpredictable nature of auctions

How to navigate the unpredictable nature of auctions

If you’re looking to buy in the current market, you’ll likely be attending an auction or two so it is important you know what to do.

Auctions are becoming increasingly popular for sellers in Brisbane with the recent high clearance rates. Eliza Owen, head of research at CoreLogic, says the clearance rates are above average in Brisbane.

“Not only have volumes been higher across Brisbane… but clearance rates have been well above historic averages through the September quarter, which may cement auctions as a more popular sales method,” Ms Owen said.

If you’re a buyer, here are some tips to help you navigate the unpredictable nature of auctions.

Price Limit

Auctions are fast-paced and the price can climb quickly, so make sure you set your price limit. Decide on your maximin bid before the auction begins and stick to it; try not to get caught up in the atmosphere! Perhaps write your maximin bid down and put it into your pocket on the day as a physical reminder.

If you happen to be the highest bidder and buy the property, you will have to pay a 5% to10% deposit, whichever is approved by the seller, on the day. So come prepared.

32 Eva St, Red Hill living room
Auction: 12th November, 4 pm | 32 Eva St, Red Hill

Register for the auction

In Queensland, it is a legal requirement that you are registered should you wish to bid. On the day, find the agent to assist you with completing the required paperwork. If you’re unsure about your intentions, register anyway. If you register you are not required to bid; however, you cannot bid without registering.

Make sure you bring photo identification, such as a drivers license or passport, to register.

Visit other auctions before you bid

With plenty of auctions happening each weekend, now is a great time to attend some auctions to observe the vibe. Familiarise yourself with the jargon and pace, and pick up on any tactics. This will give you confidence for when it is time for you to bid. You’ll have set your own expectations and will know what approach you wish to take.

8/213 Taringa Parade, Taringa living room
Sold | 8/213 Taringa Parade, Taringa

Read the room

Position yourself in a spot when you can read the room to see what your competition is doing. Sam Lally, a buyer’s advocate, believes that genuine bidders usually stand with their arms crossed. He also monitors the bidder’s shoulders as they typically drop when they have hit their limit.

Once a bidder slows down and or shows signs of distress, you can anticipate that they are near or have reached their price limit; giving you a chance to make another bid quickly to knock them out, getting you one step closer to buying the home.

In turn, make sure your body language remains discrete. Lally recommends standing with your hands behind your back so that you’re harder to read.

Don’t get emotionally invested

Make sure you think with your head, not your heart. If you are emotionally invested and already envisioning your dream life in the house, it is easier to make rash decisions and potentially bid too high. Imagine you’re bidding on behalf of your friend, rather than yourself to remain level headed.

You will likely have to attend a few auctions before you are successful, so go in with those expectations, and it is less likely you’ll burn out.

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    Byrony O'Neill

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