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Auction

Is it better to have someone else bidding at auction for you?

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The most dramatic moments of any property reality show worth its salt are filmed on auction day. Tensions are high, anticipation builds and the home viewer is on the edge of their seat, waiting for the weaker link to crumble and the gladiator to emerge victorious. This understandably sets the tone for new buyers in real life, who can approach their first auction with anything from mild butterflies to a full-scale panic attack. You’ve worked so hard to get to this point and buying a house is a really emotional experience for many. It’s natural to feel excited, anxious, terrified and exhilarated all at once!  

Of course, bidding is part of the overall experience of buying property, so you should give it a go if you feel you can. You don’t need any special skills – just the ability to maintain a calm and unreadable exterior and the capacity to do quick, on the spot calculations as the bidding escalates. Bidding at auction for yourself can save you money and, if you manage to master it, be quite exhilarating especially if you’re the highest bidder. It also offers you the flexibility of being able to change your mind as the action unfolds. Things can come undone though, thanks to that magical little hormone called adrenaline. It either floods your body and mind beyond the capacity to speak, breath or see, or it can whip you into a ‘take all my money’ frenzy that sees you totally blow your carefully planned budget.  

If you don’t think you have the emotional fortitude to bid for yourself, getting someone else to do it for you can be a great solution. It’s quite a common practice and using a proxy stand in to do your bidding when buying a property at auction takes away a lot of the pressure and uncertainty. Ideally you will choose someone more experienced than you are to do your bidding. They should understand the auction process and have made themselves known to the auctioneer as your bidder, before the auction begins. A close friend or family member that you trust could do the bidding for you, but just be sure they are better qualified than you. First time bidders can get scared off by the process. Aggressive bidders can be intimidating and impact on other peoples’ ability to compete.

A professional, such as a buyer’s agent or even a real estate agent you have befriended, will be able to remain objective and maintain the focus and momentum needed to keep bidding until the goal is achieved. Buyer’s agents can be used for the whole process of finding a house but they are particularly useful when it comes to bidding at auction. You pay them a fee to act on your behalf and they conduct the bidding in a professional manner, due to their experience and intimate knowledge of the process. It enables you to deal with the emotions you may not be able to control, while they calmly execute your intentions in an objective and productive fashion. You don’t even have to be at the auction if you don’t want to – you can stand by with them on the phone as it unfolds, from home, your car or a local café. 

Having someone else bidding at auction for you does not mean you get to just hand on all the responsibility to them. You still need to be prepared. It does however bring objectivity to the proceedings and it’s useful for both of you, if you have a clear buying strategy in mind first. Your bidder should be equipped with clear instructions about what you want, including knowing what your upper limit is when they bid for you. A buyer’s agent may well bid for others several times a week so they can advise you on their bidding strategies.

There is a risk with someone else taking care of your bidding – the auction may pan out in unexpected ways and they may handle it differently from how you would. This can work in your favour but also against it. You could lose your dream property, but you might also snap up a bargain result, that you may not have had the bidding skills to achieve. The decision is best made by thinking clearly about what it is you want to achieve and making a realistic assessment about how well you can deliver that goal yourself. If your nerves get the better of you just thinking about it, then you can be sure that will also be the case on auction day. If you like a bit of adrenaline to keep things interesting then go for it! 

 

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DISCLAIMER

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

Tags: Buying

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