Bryce Holdaway joins us with his best auction bidding tips for buyers.
Kevin: If you’re intending to go bid at a property auction this weekend, here are some great bidding tips for you as a buyer. Joining me to talk about those from EmpowerWealth.com.au – they are buyer’s agents – Bryce Holdaway.
Good day, Bryce. How are you?
Bryce: Hey, Kevin. Good. How are you?
Kevin: Good. Are you bidding at any auctions this weekend?
Bryce: Yes, we’re always bidding at auctions everywhere.
Kevin: Yes, that’s your business. Tell me some of the strategies you use or some of the advice you’d give for people going to an auction to bid for themselves.
Bryce: The number one, Kevin – this is easier said than done – is you have to have this supreme confidence that you’re there to buy. It’s largely a game of bluff, and you need to let the other bidders who are bidding against you know that you mean business and you’re there to buy. It’s actually not easy to do, given it’s that public speaking environment and everyone can get a little bit intimidated.
The analogy that I talk about is you’ve set a limit, and let’s call that the cliff face. Your job is to run as hard as you possibly can at that cliff face knowing that no sane human being would actually ever jump; you’re going to stop right at the very end. But right up until the point where you do stop, someone who is observing you would look at you and “Oh my goodness, he’s going to jump off.”
That’s the same analogy when it comes to bidding at an auction. You have to run at that cliff – i.e. your upper limit – as hard and as fast and as confident and as boldly as you can, because what you’re doing is sending a message to the other bidders that you mean business and you want to buy, even though at the end of the day, every single person – including your buyer’s agent – has a limit.
Kevin: I’ve never heard it expressed that way, but really, you’re just showing absolute confidence. You have no hesitation whatsoever, just very bold.
Bryce: I’ve seen people turn up in Porsches. I’ve seen people wear the preppy vests. I’ve seen people put the Tom Cruise aviators on. I’ve seen people try to intimidate people at the beginning of an auction. The only thing I’ve ever seen consistently work is confidence, and as I said at the top, it’s easier to say than to do. But it is the number one tactic, in my view, for anyone at auctions.
Kevin: Okay. Another one?
Bryce: For me, position where I stand is really critical. I actually want to stand on the shoulder of the auctioneer. If you imagine the auctioneer standing in front of the property looking at the crowd of bidders, I want to either be on his left shoulder or on his right shoulder and enough distance away from the auctioneer that he or she doesn’t feel like I’m encroaching on their space, because these auctioneers have big egos and you don’t want to go into that space where you’re actually putting them off.
But the reason I want to stand there is I want to see what the auctioneer sees. And I actually want to make sure that if anyone is bidding against me, I want to know who they are to be able to look them in the eye.
Kevin: That’s very intimidating.
Bryce: It is. That’s my job, to be professionally intimidating so that people keep their hands in their pockets. Because my third tip is once I know who my bidders are, I watch them. I don’t spend much time focusing on the auctioneer; I spend all my energy focusing on the other bidders because I want to know (a) who they are, and (b) I want to look for their non-verbal body language.
I want to know when they’re starting to get sweaty. I want to know when they’re starting to get fidgety. I want to know when they have that look, the one, Kevin, where all of a sudden, the bid comes in and their eyes dart to their partner, because I know they’ve just reached their limit and I’m pretty close to going in for the kill.
So, I want to look at them and I want to maintain eye contact with them. I spend more time focusing on them than I do on the auctioneer.
Kevin: Wow. What next?
Bryce: The next one is I call the auctioneer by name. Kevin, you’re the auctioneer. I’m standing on the shoulder. I’m looking at my competition, and it comes in for a bid. I’ll go, “I’ll give you another $1000. Thanks, Kevin,” and I say your name purposefully.
Kevin: Why is that?
Bryce: Because I want the perception that there’s a really tight relationship between me and the auctioneer. I want the other people who are bidding against me to go “Hang on a second, what’s going on here?” They put their hands in their pockets and they go “Do these guys actually know each other?”
The reality is I don’t know them… Well, I probably do know them a lot better than the people in the crowd, but there is certainly no commercial relationship other than I’m just calling him by name; no one else is doing that because I want the perception.
Remember this is two parts strategy, one part bluff. I want the perception that we’re in bed together, and I want them to start going in their mind “What’s going on here?” and then hopefully, put their hands in their pockets.
Kevin: Wow. I never want to bid against you. What else, mate?
Bryce: My fifth one is slow the bids down to $1000 as quickly as possible. A clever auctioneer won’t let you do that. But my job is to slow the bidding down; their job is to slow the bidding up. I will do whatever it takes. If they ask for ten, I’ll give them a five. If they ask for five, I’ll give them a one. Clever auctioneers won’t let you do that, but I’ll be persistent.
Don’t be afraid, when they’re calling for a $10,000 bid and they won’t reduce it, actually give them $13,000 because what happens is the next one, they want to round up, so the next one they’ll obviously accept it is a seven, and then you can match the seven.
You can actually strategically get your way down to a lower amount as quickly as you can. But ultimately, you want to slow the bids down to $1000 as quickly as you can.
A slight footnote to that is I never really bid less than $1000, because I only see people bid less than $1000 can make close to their top limit, so I don’t want to send any messages to my competitors that I’m close to my upper limit.
Kevin: Yes, quite intimidating, too, if the bidding does actually get down to $500, then you throw in another $1000, it’s almost going to knock them out as well.
Bryce: Yes. No one does $500 unless they’re very, very close to their upper limit.
Kevin: Yes. What else, mate?
Bryce: My last one is don’t bid against yourself. If you’re in a situation where the auctioneer throws in a vendor bid and you’re the person who had the bid prior to them, keep your hands in your pocket. Don’t bid against yourself, because what they want to do is throw in another vendor bid and then all of a sudden, you realize there’s actually no one else here. I’m the only competition; I’m working against myself.
So if the auctioneer puts in a vendor bid and it’s over to you, sit tight. Wait until the very end, and if you want to throw in a final one just to make sure that you have the right of first refusal to negotiate the reserve price, you do that. But during the auction, never, ever bid against yourself.
Kevin: There you go. Some great strategy insight there. Go back and have another listen to that, I can tell you. Bryce Holdaway is a buyer’s agent from EmpowerWealth.com.au.
Bryce, thank you for that insight, mate. I can tell you, I certainly don’t want to bid against you this weekend. That’s for sure.
Bryce: Good on you. Thanks, Kevin.
Bryce Holdaway joins us with his best auction bidding tips for buyers.