Maybe once there was an element of mystique to property auctions. No longer. Programs such as The Block and the difficult hunt for affordable property have exposed us to every trick in the book.
Have auction tactics lost their potency? In pursuit of fresh perspectives, Money spoke with auctioneers who are experts in fields outside the cauldron of residential property. This is what they would do themselves to gain an edge.
Peter Ruaro, a stock and station auctioneer for almost 40 years, operates in the high country. He has sold 250 cattle in 10 seconds and 10,000 head over three days, and he advises, “A buyer should know the going rate for the property – whether it’s dollars per kilo or residential property”. Do your research, set your limit.
When to start?
According to Martin Farrah, auctioneer with Lawsons specialising in fine art and antiques, “Trade buyers hang back, while novices are more likely to jump in first so as to get things going. Personally, I would normally hold back.”
Ruaro starts low, “but if the auction became really heated, I’d be prepared to go for the punch and a big figure near my limit”.
Science of bidding
“I am a fan of getting the card up quickly following someone else’s bid, rat-a-tat,’ suggests Farrah. “This is what the professional buyers from state art galleries do.”
George Savva is the auctioneer and principal of LJ Hooker Coogee and has worked in Sydney’s eastern suburbs since the 1970s. His tip? “When the bidding gets down to increments of $1000, don’t bother making your own $1000 bid.
“Everyone can find another $1000! No. This is the time to go up by $5000. Respond rapidly, like you have an inexhaustible supply of bundles of $5000, even if you don’t.”
But how do you battle against a professional? “Intimidation,” says Scott Andrews of Andrews Office Furniture.
“Most of the buyers at my auctions are dealers,” says Andrews.
‘”Dealers often have already mentally sold the furniture to a customer and they can lose their cool against a bidder who comes at them relentlessly. This is income for them, but they can throw in the towel and move on if you make it too hard. Wait till they think they’ve won … then trump them solidly.
“This is demoralising, affecting a person’s emotions and ego.”
Andrews also believes in using the momentum generated in a heated auction. “This is what will drive the inexperienced buyer past their ‘walk away’ point,” he says. “But sometimes it’s a good tactic to disrupt the momentum too.”
Savva agrees. “Near the end, say your bid in full – not ‘$750’ but “seven hundred and fifty thousand dollars”. Remind everyone just how much money they are contemplating spending.” This tactic serves as a warning to those who have surged past their limit and are bidding on adrenaline and caffeine.
If the auction lulls, “Go doggo and lie quiet,” recommends Andrews.
‘It’s like the situation where the traffic light turns green and you’re the only one driving forward; you ask yourself, ‘Am I doing the right thing here?’.”
Where to stand
All agree with Farrah: “If you are hesitant or reserved, stand at the back. But if you are boisterous or more of a show-off, stand at the front and place your bids with confidence. Give the impression that ‘this person is never going to stop, so they might as well have it’.”
Body language is an unreliable indicator. “But I can usually tell when someone makes their last bid – their body language changes. You see them work up to this point and then they seem to drop their shoulders and relax,” notes Farrah.
“A good stock auctioneer knows where the buyers have come from and should have a fair idea if they can afford to pay more because their region is doing well,” cautions Ruaro. In other words, buyers and agents are watching you too. If you have big-noted yourself earlier or appear wealthy, you can expect pressure to draw you out.
“Show up,” encourages Savva. “People make a mistake when they assume they will miss out at auction. News about an auction boom can discourage buyer numbers. The story is not just about the centre of Sydney or Melbourne.”
Vendors commit much time and money to get their property ready. At the tail of an auction boom, prices drop and buyers diminish. Be there.
All the experts agree: if you are not calm and confident, then have someone represent you who is icy – a friend or buyer’s agent. Licking your wounds hurts a few weeks …but paying beyond your limit is 30 years of pain at 5.90 per cent per annum. ACTION PLAN
Tips from art auctions
- Obtain expert advice on condition and value.
- Hold back initially
- Meet other bids with a rapid response
- A knock-out bid can be effective
Tips from livestock auctions
- Know the value of what you are buying – others will.
- Start the bidding low
- When bidding gets heated, respond with a large bid
- Gauge the mood from previous sales that day
Tips from office furniture auctions
- Come out early with a low bid
- Be bold and intimidating
- If the auction lulls, watch and wait.
- Let doubt build.
- Even professionals can be encouraged to spit the dummy and walk away