The Four Biggest Auction Mistakes
19 Feb, 2019
By Justin Nickerson
Improve your Real Estate Auction Strategy – Don’t make these rookie mistakes.
Auctions are a psychological battle, so it’s important to go in with a game plan, says Apollo Auctions auctioneer Justin Nickerson.
Bidding confidently and aggressively rather than holding back sends a clear message to your opponent that you’re there to buy the property – no matter the cost.
Using assertive body language, knowing your absolute limit, and taking it slow and steady are also important.
But there are things you should never do at auctions – mistakes that may even cost you your dream home.
Mistake #1: Being inactive
The most common mistake bidders make on auction day is taking a back seat.
Mr Nickerson says he sees it all the time.
“Some people adopt this non-strategy because of fear, but sometimes they’re following bad advice or they falsely believe it will somehow ‘intimidate’ the other bidders,” he told WILLIAMS MEDIA.
“The truth of the matter is they are better off bidding because if they don’t, they will just feel more pressure.”
Mr Nickerson says almost all bidders who do this end up going home without ever raising their paddle.
“When you bid you send a message to everyone else that you’re there to buy the property. If you don’t bid, you’re not sending a message to anyone, are you? You might think you’re going to swoop in at the end, but the reality is you’ll probably be in competition with someone who has already placed eight bids and is feeling much more comfortable than you.
“Of course, as an auctioneer, I would suggest bidding early, but when it comes down to it, if a property is being sold at auction, you have to bid to have any chance of buying it,” he said.
Mistake #2: Believing that inactivity is a strategy.
The only thing worse than being inactive is believing it’s a smart strategy to use.
“If you ask a bidder what bidding strategy they will employ – the most common retort is “we are going to wait to see what happens”. This answer is usually born out of attempting to hide a strategy, fear or mostly a mistaken belief that waiting for some serendipitous moment in the auction will be the best way to buy a property they have been obsessing over for weeks,” Mr Nickerson said.
But the reality is that waiting to bid just piles the pressure on yourself.
“Every time someone else bids, they get more comfortable and you internalise the bidding decision.”
Mr Nickerson says the only way to bid is to buy.
“Inactivity isn’t a strategy it’s a hope.”
Mistake #3: Playing your cards too close to your chest.
The only opponent in an auction are the other bidders – not the agent or the auctioneer. But Mr Nickerson says he’s seen lots of bidders make the mistake of thinking they can’t trust the agent.
“There’s a natural distrust of the agent as they act on behalf of the seller, but the agent can be your best ally when it comes to information pre, during and after the auction,” he said.
“Deliberately misleading the agent on things such as your level of interest in the property ultimately won’t assist you in purchasing the property,” he added.
The only card you should hold close to your chest is your budget, Mr Nickerson said.
Mistake #4: Failing to seize a great opportunity when it presents itself.
Auctions with only one bidder are becoming increasingly more common – an opportunity you’d be crazy to miss out on.
“If that situation presents itself as a bidder, treat it for what it is – a golden opportunity to negotiate directly with a motivated seller without any outside competition interfering.
“Commonly we see buyers let this opportunity slip between their fingers out of fear, or sometimes out of ego and in the long run this can cost you dearly,” Mr Nickerson added.