{"id":12363,"date":"2017-06-25T03:00:03","date_gmt":"2017-06-24T17:00:03","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=12363"},"modified":"2017-06-25T03:00:03","modified_gmt":"2017-06-24T17:00:03","slug":"make-bidding-at-auction-fun-haesley-cush","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/make-bidding-at-auction-fun-haesley-cush\/","title":{"rendered":"Make bidding at auction fun \u2013 Haesley Cush"},"content":{"rendered":"

We get some tips for auction bidders from one of Australasia\u2019s most skilled and entertaining auctioneers.\u00a0 We discuss the changes that have taken place and how and why auction buying can be a lot of fun and a great way to get a property on your terms.
\nTranscript:<\/strong>
\nKevin:<\/b>\u00a0 Haesley Cush<\/strong> is a second-generation real estate agent, having worked in the industry with his family for many years and now owns and operates his own office and, as well as that, is one of the most recognized auctioneers in Australia, having appeared on\u00a0The<\/i>\u00a0Block<\/i>\u00a0and taken out many auctioneering competitions in Queensland.
\nI caught up with Haesley and asked him whether he could give us some tips for anyone looking at bidding at auction this weekend.
\nHaesley:<\/b>\u00a0 Okay, tips for buyers: firstly, you have to know the property you\u2019re about to bid on and you have to know the rules of the auction \u2013 really fundamental things. Property is research local prices so that you\u2019re comfortable with the price that you\u2019re going to pay.
\nKevin:<\/b>\u00a0 I went to a Ray White auction a couple of weeks ago, or it might even have been last week; I can\u2019t remember. It wasn\u2019t quite as formal as it used to be. It\u2019s become very casual, even with the conditions. \u201cConditions are on display. I\u2019ll quickly run through a few for you.\u201d But we used to go very formally through those conditions.
\nHaesley:<\/b>\u00a0 Yes. We just found when you\u2019d read through all 20, you\u2019d then have to go and wake everybody up because it was so bloody boring. People don\u2019t need to hear them. They\u2019re there to bid. They have all the paperwork they need. Terms of auction are\u00a0<\/b>on display. We hit a couple of the main points: you have to be registered, let them know about GST, explain vendor bids, all that sort of stuff.
\nKevin:<\/b>\u00a0 Explain vendor bids because that is interesting.
\nHaesley:<\/b>\u00a0 A vendor bid is basically\u2026 Let\u2019s imagine you\u2019re a buyer who made an offer of $800,000 and the reserve is $900,000. You turn up to the auction, I call for an opening bid, \u201cBid it off at a start,\u201d and you think \u201cI might kick things off. I\u2019ll open it at $500,000.\u201d
\nI have two options as the auctioneer. I can say, \u201cSorry, Sir. $500,000 is too low, \u201cand then you and I have a bad experience together. Or I say, \u201cSure. I\u2019ll welcome your $500,000, and let\u2019s run in $100,000 rises to take us to $600,000.\u201d
\nNow, if nobody else bids, it\u2019s kind of the end of the show. You didn\u2019t expect to buy it for $500,000. We\u2019re a long way from the reserve. So I place a vendor bid at $600,000, which is our way of saying, \u201cYou\u2019re not going to buy it for $600,000. We\u2019re still traveling in $100,000s. Will you bid $700,000?\u201d You\u2019ve already offered $800,000, so you say, \u201cSure. I\u2019ll bid $700,000.\u201d I\u2019ll take a vendor bid at maybe $750,000, again, in the absence of someone else bidding.
\nKevin:<\/b>\u00a0 I just want to stop there. That\u2019s something I can read into the auction straight away \u2013 that we\u2019re getting close to a selling point, because you\u2019ve slowed down. You\u2019ve gone from $100,000 back down to $50,000. So, that\u2019s something you can read into the auction.
\nHaesley:<\/b>\u00a0 Yes. If you think of bidding like a triangle, the chunks get smaller as we get higher. Usually that\u2019s from buyer pressure. And in the absence of buyer pressure, I have to try to read \u201cWell, if I take $800,000 from a buyer who\u2019s offered $800,000 before, they\u2019re not going to bid again.\u201d So I need to place $750,000 to take their $800,000. So, now they\u2019re back at the level they were at before, and now we\u2019ll see what happens from here.
\nKevin:<\/b>\u00a0 And they might come back at $775,000.
\nHaesley:<\/b>\u00a0 They might come at $775,000, and I\u2019d probably take maybe $780,000 to try to keep moving.
\nKevin:<\/b>\u00a0 I want to talk about vendor bids, because I think a lot of people probably would be listening to this and saying, \u201cThat sounds so unethical that you as the auctioneer would place a bid,\u201d but in reality, it\u2019s no different from any kind of negotiation, where if you make an offer on a property, the agent will take that into the seller. The seller will counter sign it.
\nHaesley:<\/b>\u00a0 And people think it\u2019s a bit foreign because they want to see competition at an auction. But the alternative is \u201cOkay, we pass it into you at $500,000 and that\u2019s the end of the day.\u201d They\u2019ve gone to all of the effort to turn up to bid at the auction. No auctioneer would ever place a vendor bid anywhere near what the owner would accept. This is not about pushing buyers above where they\u2026
\nKevin:<\/b>\u00a0 It\u2019s too risky.
\nHaesley:<\/b>\u00a0 It\u2019s just about creating a level platform and then beyond that, leave it for the open market.
\nKevin:<\/b>\u00a0 Because every time you place a vendor bid you\u2019re actually buying it back on behalf of the owner.
\nHaesley:<\/b>\u00a0 Effectively it\u2019s called a vendor bid because the vendor is saying \u201cI\u2019ll bid at that price and I\u2019ll keep it.\u201d This is their way of saying \u201cAt that price, I would buy it.\u201d And then their next bid comes. \u201cOkay, no better bid on that? Okay, at that price I\u2019d buy it.\u201d
\nPeople who are familiar with auctions quite like vendor bids because it\u2019s the vendor playing their hand as where\u00a0<\/b>they won\u2019t accept. People who aren\u2019t familiar with auctions find it really bizarre and really foreign. But as soon as that property\u2019s passed in, they\u2019re not going to find it bizarre that the owner says \u201cI want $300,000 or $400,000 more.\u201d
\nKevin:<\/b>\u00a0 In a way, what we\u2019ve done by making vendor bids public \u2013 in other words, in the old days, we used to be able to pull them off trees and no one would really know whether that was a real bidder or not \u2013 at least today for the buyer, if you nominate a vendor bid, you know exactly where you are in that buying process. You know \u201cThat\u2019s a figure that they won\u2019t accept. I need to go higher.\u201d
\nHaesley:<\/b>\u00a0 Yes, that\u2019s right. For a buyer looking for tips, they can look at how vendor bids work.
\nThere are two strategies with an auction for someone bidding today. Remember that competition is what fuels the higher price. The lower you start, the more people can afford it, subsequently the more competition you\u2019ll have. The higher you start it, less people can afford it, there\u2019s less competition.
\nWhen I bid personally, I work out my maximum price, and I launch my opening bid very, very close to that to try to kill competition. Very few people take that advice because they worry that that bid will be more than the owner accepts.
\nKevin:<\/b>\u00a0 It\u2019s almost like a king hit. It\u2019s never as high as you\u2019d go, but it\u2019s getting close to it.
\nHaesley:<\/b>\u00a0 When I\u2019ve done it, because of how comfortable I am with pricing, I just go with everything I have and if it buys it, great, and if it doesn\u2019t, I just leave. Very few people take that tactic so what makes them feel more comfortable\u2026
\nKevin:<\/b>\u00a0 Has it worked for you?
\nHaesley:<\/b>\u00a0 It hasn\u2019t, no. Because I\u2019m a little bit too conservative on my pricing maybe when I\u2019m trying to buy.
\nKevin:<\/b>\u00a0 But that\u2019s the thing. You have to go down a few dry gullies, don\u2019t you?
\nHaesley:<\/b>\u00a0 That\u2019s right.
\nKevin:<\/b>\u00a0 That\u2019s a great lesson for buyers: to set your limit and lock into it.
\nHaesley:<\/b>\u00a0 Yes. You have to kiss some frogs before you get your prince, Kevin.
\nI think it\u2019s so joyful. Auctions are so easy \u2013 no paperwork. \u201cThat\u2019s my bid. Do you want to take it?\u201d \u201cNo.\u201d \u201cSee you later.\u201d There are auctions where I haven\u2019t used that strategy previously. I get caught up in bidding and I do quite like to bid.
\nAnd the other strategy is you get to the benchmark first. So if you\u2019re in a bidding battle, people tend to think in round numbers, so you want to get to the next round number first because that is likely or could be their limit. So if you\u2019re at $451,000, get to $460,000 because maybe they said, \u201cWe\u2019ll go to $460,000 and no more.\u201d If they bid $461,000, get to $470,000 because that could be the limit. Try to get to the benchmark.
\nKevin:<\/b>\u00a0 We have about a minute to go. There\u2019s one other point I want to make and that is that if you\u2019re going to go to an auction today or even next week, make sure you find out who the auctioneer is, and then go and see one of their auctions and understand how they work before you actually go and go toe to toe with the auctioneer.
\nHaesley:<\/b>\u00a0 Usually the agent will be able to give you examples where they are.<\/b>
\nA big thing that I want to leave people with today is get pre-approved. Go and see a broker and understand how much you have, because by being pre-approved, you can make what we call a cash offer, and a cash offer can help you buy a property a little bit better.
\nKevin:<\/b>\u00a0 I want to thank you very much for giving us your time today, Haesley. I know you\u2019re very, very, busy. It\u2019s great to see you in the studio. You\u2019re welcome any time, by the way. We\u2019d love to have you back.<\/p>\n","protected":false},"excerpt":{"rendered":"

We get some tips for auction bidders from one of Australasia\u2019s most skilled and entertaining auctioneers.\u00a0 We discuss the changes that have taken place and how and why auction buying can be a lot of fun and a great way to get a property on…<\/p>\n","protected":false},"author":176692471,"featured_media":12365,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,33,10,11,13,22,23,25],"tags":[101],"class_list":["post-12363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-case-studies-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-research-topic","category-selling-a-property-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nMake bidding at auction fun \u2013 Haesley Cush - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/make-bidding-at-auction-fun-haesley-cush\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Make bidding at auction fun \u2013 Haesley Cush - 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