Four myths about buying at auction in Queensland
29 Apr, 2021
By Justin Nickerson
Auction clearance rates are at unprecedented levels across southeast Queensland as bidders battle it out to secure a property.
With clearance rates consistently in the 80 to 90 per cent range, there are currently more people who missed out on a property compared to those who were victorious on auction day.
It’s obvious that people in the southeast have become more comfortable with auctions over recent years, given the higher number of properties being sold by this method.
However, there are a couple of myths that may be hindering their chances of success, which I thought would be a wise idea to dispel.
- On the market call
It’s common for some bidders to wait for an auctioneer to say that a property is “on the market” or “we’re playing for keeps” before even raising their paddle to make a bid.This is never an overly successful strategy in my opinion because you’ve got to be in it to win it.But it’s even less of a strategy in Queensland because saying a property is on the market is not a legal requirement of a residential real estate auction.Sure, agents will often infer that bids have passed the reserve, but they are not legally required to do so, which means a bidder waiting to hear these words might wind up never doing anything about buying it at all.
- First dibs
Another common misconception is that if a property is passed in, which let’s be honest is rare at the moment, then the highest bidder is given the first right of refusal to buy it.That is simply not the case in Queensland.Rather, if a property is passed in, then it’s open slatherThis means that any bidder, or any person at all, who is serious about buying the property is able to throw their hat in the ring.
So, waiting for a property to pass in because of the false belief you will have first dibs to buy it as the highest bigger is another myth that really needs dispelling.
- Small bidsAnother misconception is that by making small bids you will slow down the auction while somehow also improving your chances of being the highest bidder at the end.Apart from annoying the auctioneer – especially in the early phases of an auction – making small bids will likely just motivate your competition even more.Rather than creating a perception of strategic mastery, small bids will probably just make other bidders think you don’t have much money to spend.
The next thing that is likely to happen is another bidder will simply submit a number that blows your budget – and your non-strategy – out of the water.
- Closing limits
Another myth that seems to still be believed by some people is that there is a limit to the number of times an auction close can be called.What I mean by that is when an auctioneer call words that infer that the fall of the gavel is imminent.Sure, sometimes an auctioneer may only do this once during an auction because of strong bidding.However, there is no limit in Queensland on the number of times an auctioneer may appear to be closing down the bids.
Again, this means that waiting for this to happen before raising your paddle at seemingly the last final moment to trick your competitors is just not advised.
What is likely to happen is the auctioneer will take your final bid – and the auction continues until the best possible price is achieved for the vendor.