Aggressive bidding, not $250 bids, are needed to take auction control
Sunday, October 19, 2014/
I live tweeted a Coburg North auction last weekend. The worst auction ever.
The agent quote for 10 Delta Ave Coburg North was $500,000 to $550,000. Two bidders kicked off the auction and it quickly reached the upper agent quote of $550,000.
However, the auctioneer wouldn’t confirm if the home was on the market.
Bidding slowed down to increments of $250 – a bidding strategy that was a costly mistake for the buyer.
After the usual theatrical intermission, the auctioneer returned from receiving the vendor’s instructions and confirmed that the property was now on the market at $555,500. Two bidders continued to take rises of $250 to hit $560,750.
One bidder attempted a knock out bid of $565,000, but failed.
A new bidder (who ended up being the underbidder) joined the action at $565,500.
All three bidders were still moving the price up in $250 increments, and after what had seemed like an eternity the three bidders reached a price of $570,000.
Then it was down to two bidders, now at $576,250 and then by $250 bids to $580,500.
Finally, after 40 minutes of mostly $250 bids the property was sold for $583,750.
Buyer’s agent David Morrell’s advice to buyers for this type of situation is to bid aggressively and take control of the auction.
By breaking the bidding down to smaller bids here – David has sometimes seen people pay $200,000 over the reserve on $1000 bids – the other people bidding think you only have $1,000 left. No one can value a property down to $5,000 or $10,000.
So increase the amount of your bid. Turn up the heat on the opposition. If you are standing next to them, offer to toss them for the property.
The realAs.com prediction was spot on; 0.2% off and the agent quote was 17% off.