Starting High at Auction

Starting higher at auction is a riskier strategy. It helps you control the tempo of the auction, so you don’t get caught up in emotions.

You must know precisely what the property is worth to you and don’t go over it Your numbers have to add up… 

By starting high, you’re disrupting the natural order of things. You will take your competition out of the running.

And that’s where the key to this technique comes in.

You have to know your numbers inside and out. That means you have to know exactly how high you’re willing to go before you have to pull out.

This technique means you’re heating the auction right up. But avoid becoming swept up and bidding more than you should.

Always pull out if the other bidder goes past your limit. Just remember that you’ve done the numbers and they’re overpaying.

At Investors Choice Mortgages, we want to help you get in a house in one year and turn it into an investment property in two.

Find out how we’re helping other first-time buyers by joining our community.

Controlling Bidding Increments

Auctioneers often use the vendor bid to help them control bidding increments. The bigger the bidding increment, the faster the auctioneer reaches the reserve.

Their ideal scenario is to use increments of $10,000 or $20,000 to get up to that reserve. The increments only get smaller once they’ve gone past it and the bidding has slowed down.

At least, that’s what happens if you allow the auctioneer to control the increments.

When you’re trying to #Slam It, you want the opposite to happen. You want the increments to drop as low as possible as fast as possible.          

Using this strategy, you take the heat out of the auction. At lower increments, the price creeps up with each bid. And because of that, your competitors have to really think before making their next bid. Bidding doesn’t spiral out of control.

Keep an eye on your competitor. If you see them confer with their partner or start to hesitate between bids, this indicates they’re near their limit.

This is when you slow it down and show you will just keep going, offer $500 increments, and come back quickly after each of their bids, it’s a war of attrition, but never go over your buy number. This is key

Investors Choice Mortgages can help you with your loan, finance, tools and resources to suit your strategy. Feel free to book a time to talk with one of our mortgage broker experts https://investorschoice.com.au/bookacall

More related articles Your Starting Bid or  The Challenges of Property Auctions

How to set realistic goals?

The question about goals and bringing it back to the now is really important. And the fact that a lot of people overestimate what their desired income is, or what they want, and what they can really live off.

Going through and looking at what you really need to live off might be an exercise as well. So, there’s one thing about saying ‘is this is this possible?’, and it’s another thing saying ‘well, in actual fact, maybe I can do better with the capital growth, I’m really going to target a higher growth area”!

So, you can then see very quickly, it makes such a big difference just by having over those 15 years, just that little 3% per year difference in growth.

Find out how many properties you need to know checking out our free online portfolio calculator https://investorschoice.com.au/portfolio-calculator

Your Starting Bid

When you attend a property auction, your goal is to wrestle control of the auction’s pace out of the auctioneer’s hands. 

This gives you time to think so you don’t end up spending more than you should. It also allows you to get inside the heads of other bidders.

By slowing the auction down, you’re giving them time to think as well. 

It all starts with the opening bid. The trick  is to bid low without bidding so low that you trigger a vendor bid.

This is a bid the vendor makes in an effort to spark bidding. And in some cases, it’s going to be really high. 

You want to give the auctioneer the feeling that your bid is high enough for them to work with.

But what if the auctioneer still puts in the vendor bid after you make your opening bid?

You stop bidding.

The vendor bid isn’t representative of the market. It’s an artificial bid that just encourages you to bid against yourself.

If somebody else bids over the vendor bid, the auctioneer’s just succeeded in controlling the bidding increments.

That’s not a situation you want to get wrapped up in.

Read more about auction, The Challenges of Property Auctions

And also, join our community to talk to the first-time buyers we’re helping right now?

First House Buyer Group https://www.facebook.com/groups/firsthomefirstinvestment/

The Challenges of Property Auctions

Many properties go to auction instead of selling through traditional channels.

That can create an issue, because of the high-pressure environment.

What makes a property auction such a challenging environment?

A property auction is specially designed to create a high-pressure environment that will cause you to spend over your limits.

They rely on you getting emotionally involved in the bidding process and spending far more than you intended.

Auctioneers are very talented at getting that extra few thousand dollars out of you.

They’ll try to take you right to your limit and then beyond.

So the true challenge in the auction environment is to take emotion out of the equation. And to do that, you’ve got to realise more opportunities exist.

It’s better to miss out and not overspend than it is to get the momentary high of winning – before reality comes crashing down.

We will help you to get it right when you’re trying to slam it at a property auction.

But for now, why not join our community to talk to the first-time buyers we’re helping right now?

First House Buyer Group https://www.facebook.com/groups/firsthomefirstinvestment/