I spoke with a person recently who was gutted they had just missed out on a property at auction and they were chasing some feedback to work out where they went wrong.
I asked them about their strategy when bidding. They didn’t have one.
Their plan was to wait until the property went ‘on the market’ and then bid.
Then she asked: “Does the auctioneer have to announce the property ‘on the market’?”
My answer shocked her. “No,” I said. It was a colloquialism that we use in Australia. I don’t know where it came from and I assume time has woven it into the fabric of auctions. However, it is not a part of any law or legislation.
There are auctioneers who refuse to use it and believe that an auction is a fluid sale from start to finish.
There should be no ‘on the market’ moments. You either bid to buy or you don’t. Then the property either sells or it passes in at the end.
At the auction in questions, they did announce it ‘on the market’, but by that stage the biding was already in the hands of the other bidders.
They had confidence in their strategy, they were increasing their bids quickly and rounding up to the next round number.
This strategy is to rain bids on your opponents and drown their hopes of buying.
She just couldn’t get in; “I should have bid again, I just felt like the other party wasn’t going to stop”.
To win at an auction requires strategy; to wait, and let other buyers build their momentum is rarely effective.
In short, any strategy that doesn’t control bidding, is a bad strategy