Its wise not to get carried away by the emotions that course in your veins at the typical auction. These emotions can include:
- The urge to own.
- The fear of loss.
- The desire to win at all costs.
- The need for fun and good cheer.
- The fear of suffering loss of face.
It all happens at the auction, because auctions create a super hot sales environment where all of the above can fester and thrive. First they gather a lot of potential buyers all cashed up with money burning a hole in their pockets to bid on just one property. Then they create the illusion that the property can be bought for a song, where you can steal the property from the hapless, desperate seller.
The other illusion auctioneers want you to buy into , like all real estate agents is that they are on your [the buyers] side. Believing this is the biggest blunder that buyers can make. The Real Estate Agent is sworn to his or her fiduciary duty to look after the principal's best interest. The principal is the one who pays the agent the commission. At auctions, that is always the buyer! So, if the agent is ethical, he or she will take every last dollar that he can from you, the buyer, because that's what he or she is paid to do. So don't try to become friendly with the Auction agent, because he or she will only assume you are sucker that can be taken advantage of. Be warm, be civil, be polite, but be disinterested and vague. It could save you thousands.
Then the auctioneer removes from the buyer the time to think and ponder. You are forced to bid faster than you can think. A good auctioneer creates an avalanche effect and all the dreams of buying a bargain evaporate as the reality of what's happening sinks in. You don't want a bargain any more, you want to pocess this scarce property before you, you want to win at all costs. You are being worked by a master of psychology and he's winning, not you.
Finally the last two bidders slug it out as the early dreamers are tossed aside as also-rans. The auctioneer will spur the competitive spirit out of these last to drive bidders till one drops exhausted, beaten and ashamed he didn't have the resources at his disposal that the winner did. anyway he reasons, the guy had more money than sense.
The winner is then congratulated and can celebrate whilst the losers can do as they please.
Then when you think it couldn't get any worse, the last deep cut. No cooling off. You can suffer buyers remorse at your leisure. The auction system has removed all your consumer rights that Ralph Nader and others that followed him fought so hard to win for you.
Now you have been slapped into reality land, let's see what you can do to equalise the situation in your favour.
- Here are some tips on how to do it:
After finding out how much you want to spend, make inquiries about the contract, what the property includes and be certain it's clear of major defects. - Have a building report and pest inspection done before the auction.
- On auction day, make sure the contract has not been altered.
- Arrive on time for the auction, never early.
- Never introduce yourself to the auctioneer and let them know you are interested in the property. Stay out of his figuring. Auctioneers feed on this desire to big note yourself and know how to work it. Under no circumstances let the auctioneer know what price you are willing to pay.
- Remember that the Auctioneer has to work in the best interest of the Vendor, not you.
- That's your job, so do it well.
- Never make the first bid. [The one's that do never finish up with the property, but do add to the price.]
- Slow the bidding down, don't add to the feeding frenzy.
- Never bid till you know that the property is "on the market."
- Always look disinterested.
- Always think before you bid. Tease the auctioneer and the other bidders.
- Never allow the auctioneer to flatter you or bully you. He's in control of the auction, but you must in in control of you.
- If he tries to squeeze you, relax and disassociate yourself. See it happening from a distance. Never take it personally.
