Lately, we are increasingly being engaged by clients to bid for them at auction. For us, we thrive on the atmosphere and adrenaline, but more importantly we are very good at it. This increase in enquiries tells us buyers are realising getting caught up in the excitement of an auction and the potential for overpaying can have serious consequences.
A few weeks ago we attended an auction at which the winning bid was a massive $205,000 over reserve. It was a lovely home but definitely not worth the $1.705m price tag. The auction became very interesting when the price shot up $100,000 in $5,000 increments in less than 60 seconds. The Auctioneer looked as though he was watching a game of tennis! It came down to just 2 bidders (we were out by this stage) who got into what we jokingly refer to as the “ego panic zone”. It was obvious both men were desperate to win and neither wanted to back down in front of such a large crowd. The pressure of the Auction also being filmed by Domain Magazine just added more fuel to the frenzy. One bidder either hit his limit or snapped out of the zone, leaving the other to claim a now very overpriced property.
We will never know the motivation of the winning bidder but my guess is he was bidding with his heart and not his head. Our clients set their limit based on advice from us, and where they saw the value of the property. It was as simple as handing us a piece of paper to carry out their instructions. It was clean, professional and without emotion. They really liked the property but as they watched events unfold they knew the final outcome was well above anything we could have predicted – even the owner was shocked! They walked away knowing they had made the right decision.
Finding a home to live in is an emotionally draining experience but paying more than you should simply because you are fed up and exhausted from searching can cause more pain than it’s worth. Use your head, and when you finally find what you are looking for your heart will thank you.
If you want more tips on how to bid at auction or would like to learn how Innovative Property Advocates can help you secure your dream home, give us a call today on 0411 522 233.