In a heated property market too many buyers are missing three things to put themselves in the winner's seat at auction.
If you're looking for home to buy in Melbourne right now, chances are you’re tearing your hair out (and with pretty good reason).
With auction clearance rates above 80%, instances of agent underquoting and fierce competition, it's tough out there.
So while conditions are challenging, I want to share with you three ways you can significantly improve your chances of being successful at auction.
Mistake #1: You’re way off the money.
Right now, the market is moving fast and reported results are already out of date.
You need to factor that in to your preparation for auction day.
Look at the most recent comparable sales for similar properties and if those comparable sales are falling in the upper end of the quoted price range, you're going to need to adjust your budget for auction to compensate for the market movement since those sales.
This can be as high as 10% depending on the market and competition level.
Mistake #2: You don’t have a game plan.
If you're going to an auction without a plan of what you're willing to bid up to, then you risk your emotions ruling on the day and your decisions just won't be rational.
The best plan is to set your budget for the property ahead of time - ideally the day before - when you've got a cool head.
Decide what you think the property is worth based on your research and decide if you want to factor in a small stretch budget, depending on what happens on day.
Mistake #3 – You’re not in the winning position.
This can happen in a couple of ways.
The first is if the hammer goes down and you're not holding the highest bid.
A lot of buyers wait for an auctioneer to declare a property on the market or to go inside to consult with the vendors.
In some cases, the auction can move so fast that bidding passes the vendor’s reserve and the auctioneer might knock the property down without needing to go inside to consult the vendors.
The second scenario is when the property is passed in and you’re not holding the highest bid.
In that scenario, without holding the highest bid, you don't get the first chance at meeting the vendor's reserve price.
You’ve left it to chance and the bidder with the highest bid might walk away with the property if an agreement is reached.
So there you have it: the 3 reasons buyers are missing out at auction and how you can better your chances of success.
When it's not you, it's them
Now in the current market, we are seeing some strange and some desperate behavior.
You can take some solace in knowing that when you're up against competition that has seriously deep pockets and is willing to overpay past the value of the property you need never regret sticking to your game plan and stopping at your limit.
How we can help
When you engage us you benefit from the countless hours of expert research into the comparable sales, the competition levels and vendor motivations for each and every property.
We walk you through our auction strategy and execute it with precision on the day.
Having us in your corner gets you the best properties on the best terms.
We'd love to discuss your property buying goals and how we can get you there faster.