{"id":3386,"date":"2015-02-09T01:00:48","date_gmt":"2015-02-08T14:00:48","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=3386"},"modified":"2015-02-09T01:00:48","modified_gmt":"2015-02-08T14:00:48","slug":"auction-strategy-tips","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/auction-strategy-tips\/","title":{"rendered":"Auction Strategy Tips"},"content":{"rendered":"

 
\nMichael Yardney from Metropole Property Strategists<\/a>\u00a0draws on his years of experience at buying property at auction. He has 9 pearls of wisdom for you.<\/p>\n

Transcript<\/h4>\n

Kevin:\u00a0 <\/b>Here we are in February already, and the auctions are cranking up for 2015. Joining me once again to talk about auction strategy, if you find yourself at auction, is Michael Yardney from Metropole Properties, who does this quite often, not only for himself but for clients, as well.
\nGood day, Michael.
\nMichael<\/b>:\u00a0 Hello, Kevin.
\nKevin:\u00a0 <\/b>Let\u2019s have a look at your tips for buying at auction.
\nMichael<\/b>:\u00a0 First of all, we have to assume that all the other homework has been done about choosing the right location, choosing the right property in the location, so I\u2019ll just concentrate on what happens just before and when you get to the auction. Is that okay?
\nKevin:\u00a0 <\/b>Yes, please. Thank you.
\nMichael<\/b>:\u00a0 I guess the first thing you have to realize, of course, is that an auction is an unconditional sale. You\u2019re stuck with it, so you have to do your homework first. First of all, I guess that means you have to have your finance pre-approved. Make sure that you have the ability to buy unconditionally, not subject to evaluation. You know where you stand.
\nThe second thing is you have to do all your homework, your due diligence prior to the auction. This may include a strata report, maybe building and pest inspections, checking zonings, council ratings, etc.
\nThen understand what the value of the property is again by doing your homework, by looking at comparable sales, and giving yourself a fair limit to give yourself a good chance. But never do your limits on a round figure. Do you know how many people finish on $500,000 or $550,000? Always give yourself one or two bids above that. That may just get you that property.
\nKevin:\u00a0 <\/b>Just on that point, Michael, when you are doing a strategy before you go to an auction, would you have a couple of figures in your mind, like the figure I\u2019d really like to buy it at and the figure I\u2019m prepared to go to?
\nMichael<\/b>:\u00a0 Yes, and they\u2019re very different, aren\u2019t they? I\u2019d like to buy cheaply, too, but I\u2019m also realistic, knowing that if it\u2019s a good property, there\u2019s likely to be other good competition. If I was the only one bidding on them, I\u2019d be a bit concerned have I actually chosen a dud somehow or another, not seeing something everyone else has?
\nKevin:\u00a0 <\/b>That\u2019s a good point.
\nMichael<\/b>:\u00a0 I\u2019d also get my solicitor to check my contract beforehand, make sure I understand my legal obligations if I\u2019m a successful bidder. You\u2019re allowed to ask for changes, you\u2019re allowed to ask for commitments. That doesn\u2019t mean that they\u2019re going to accept them, but if I do ask for changes and they do accept them, you often have an indication of how many other potential bidders there are. In other words, if they\u2019re very standoffish and not prepared to countenance any options or changes, maybe there\u2019s other strong competition. On the other hand, if they\u2019re prepared to look at it, maybe there won\u2019t be as many people.
\nKevin:\u00a0 <\/b>Maybe.
\nMichael<\/b>:\u00a0 Also, understand the rules of an auction. Go and see as many auctions as you can, but with the particular auctioneer, not the company, because each auctioneer has their own set of words, they have their own way of doing things. So when the property comes on the market, you\u2019ll know the words they say when they\u2019re going to sell. You research auctions, the agency selling it, and this auctioneer, as well.
\nOn the day, I\u2019d turn up early. If it\u2019s at the property, not in rooms, I\u2019d actually be looking at the surroundings. I\u2019d be seeing who the attendees are. Of course, don\u2019t forget to bring your checkbook.
\nWhen I go there, I actually hang around where the contract is, which is often on the kitchen table or somewhere, just to see who else is looking. Interested parties will look at the contract, while neighbors who are just sticky-beaking probably won\u2019t look at the paperwork.
\nKevin:\u00a0 <\/b>When it comes to the time of the auction, where do you position yourself with the auctioneer?
\nMichael<\/b>:\u00a0 I actually do something that\u2019s a bit cheeky. I actually stand as close to the auctioneer, facing the crowd, as I can. I\u2019m usually there in a suit, and they wonder, \u201cWho\u2019s this guy?\u201d He\u2019s another estate agent? He\u2019s part of the team? All of a sudden, he\u2019s bidding.
\nKevin, what I actually do is I speak to the auctioneer by name. I will usually start the bidding in this market, which is a hot market compared to previous years when it was flat. I\u2019ll say, \u201cJohn, I\u2019m going to start by bidding $450,000.\u201d
\nWhat do you think? Hey, he knows him by name. He\u2019s standing there as part of it. I\u2019m confusing them. It\u2019s all legal. It\u2019s all correct. I\u2019m confusing them a little bit. I call him by name, that\u2019s where he\u2019s starting.
\nI often start close to where I think the reserve is going to be, and it stops the momentum. Then I bid strongly, and my last bid is as strong as my first. Without hesitation, I go right up to the limit I\u2019m given by my clients, and if I do it that way, people have no idea where my limits are. It\u2019s basically psyching them out a bit.
\nKevin:\u00a0 <\/b>Yes. There is a skill in bidding at auction. There is no doubt of that whatsoever. That\u2019s why anyone who\u2019s inexperienced with that should consider getting a buyer\u2019s agent to do it for them, which is what you do, I guess?
\nMichael<\/b>:\u00a0 I guess, that\u2019s exactly what we do. There\u2019s also a skill that happens if the property gets passed in. When the property gets passed in, a lot of people think you have to go inside and you\u2019ve actually got to talk with them and you have to negotiate on their turf. I actually don\u2019t do that. I say, \u201cThat\u2019s okay. I do want to speak with you, but if you don\u2019t mind, I\u2019m going to stay out here.\u201d
\nThere\u2019s a reason why. It\u2019s again partly playing the game, but I\u2019ve found that when you go inside, they say \u201cOh look, the under-bidder is hanging around outside, and he\u2019s moseying around.\u201d I want to make sure that he is there or he isn\u2019t there. I play it on my turf and I play it my way again. It\u2019s a little bit like chess. It\u2019s a little bit like knowing where you want to end up and having a plan and then implementing that plan.
\nKevin:\u00a0 <\/b>There you go. That\u2019s the plan for auction from Michael Yardney at Metropole Properties. Thanks for your time, mate.
\nMichael<\/b>:\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  Michael Yardney from Metropole Property Strategists\u00a0draws on his years of experience at buying property at auction. He has 9 pearls of wisdom for you. Transcript Kevin:\u00a0 Here we are in February already, and the auctions are cranking up for 2015. Joining me once again…<\/p>\n","protected":false},"author":176692471,"featured_media":2295,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[101],"class_list":["post-3386","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-podcast"],"yoast_head":"\nAuction Strategy Tips - 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\/auction-strategy-tips\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Auction Strategy Tips - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  Michael Yardney from Metropole Property Strategists\u00a0draws on his years of experience at buying property at auction. 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