Preparing for Auction
I was bidding on behalf of a client in Annandale for a small house on a quiet street. Prices in Annandale can shift quite a bit depending on the pocket of the suburb. Two houses can look similar but end up attracting a different buyer pool depending on the street, orientation, size, condition and potential. That is something I spend time working through before auction day.
The week before, a similar house had sold nearby. Interestingly, there was only one registered bidder on that property. The one I bid on had four registered bidders. The difference was the location and the potential of this property, while the size and condition were fairly equal.
During the week I spoke with the selling agent about how the two properties compared. We talked through the street, the condition of the house and the level of interest they had seen during the campaign.
I also asked how many buyers they expected to register. The agent gave me an accurate view. However, even they didn’t account for an extra bidder on the day.
The Day of the Auction
When I arrived for registration, there was someone signing up who had just seen the property for the first time that morning. They had come through the open inspection immediately before the auction and decided to register.
That is one of the reasons I like to arrive early. Watching the registration process can give you a better idea of who is going to register and possibly bid.
By the time the auctioneer called everyone together there were four registered bidders including me. Another buyer’s agent was there as well, along with two home buyers.
Opening Bid
When the auctioneer asked for an opening bid, I started the auction.
My opening bid was a decent chunk above the guide. I did that deliberately to flush out buyers who are hoping the property might sell somewhere near the guide.
During the Auction
After that there were a couple of $10,000 bids between me and one of the home buyers, but they bowed out after two bids.
The person who had registered on the day never actually placed a bid.
From that point it was just me and another buyer’s agent bidding.
Each time I placed a bid they would pause and look down at their phone. A few times they stepped slightly away from the group and sent a message before coming back with another number.
You see that often during auction bidding. It usually means the agent is checking in with their client before placing the next bid.
The Final Stages of Bidding
Before the auction we had already worked through the strategy and the limit with my clients. The house needed renovations, so part of their planning was making sure they kept enough budget aside for the work after purchase.
That meant the number we could pay for the property had to be considered carefully. So there was nothing to work out in the moment.
I knew where I wanted to open the bidding. I knew how I wanted to move the price early to see who else was serious. And we already knew where we would stop.
Each time the other buyer's agent came back with a bid, I responded quickly and kept the auction moving.
That continued for a short time until the bidding reached the limit we had already agreed on.
At that point we stopped.
The other buyer’s agent kept going and bought the property.
It was still the right outcome for my clients.
The Strategy
They had gone into the auction with a clear understanding of how this house was positioned in the Annandale market, and a clear budget that also allowed for the renovations they planned to do.
Auctions move quickly and it is easy for buyers to stretch in the moment. Having a plan before the auction starts makes those decisions much easier when the bidding starts climbing.