Property Auction Craft
How do I set a bidding limit and stick to it?
Okay, to set a bidding limit you really need to work out what you can afford to pay for the property. To do this you'll need to consider what the property is worth, when you've done any works, what the cost of the works is, additional costs such as legal fees, and the profit you want to make. Once you've arrived at this figure, I suggest you write it on a piece of paper, have that with you in the auction room and stick singlemindedly to it. It might be an idea to take along a friend or a partner who makes sure you don't go over that limit, and if you do, just go by a little bit.
Can I anticipate what the reserve is?
It's difficult to anticipate where the reserve price is going to be set. However, a good indication would be the guide price. Bear in mind though, depending on the auction house which you are looking at, the guide price could be either twenty percent above or below the reserve price or somewhere inbetween.
Will I know when the reserve has been reached?
The auctioneer would say so, the billing increments would decrease, and the auctioneers body language
What should I do if I think the reserve has been reached?
With property auction craft, if you feel the reserve has been reached, then it may well be a good idea to try and reduce the increments that the auction is going up in. For example, if he's asking for bids of a thousand pounds, shout out "five hundred pounds," and he'll know to cut his increment in half. The auctioneer may or may not change the bidding increments to your new level, but it's definitely well worth a try.
What are the best bidding tactics?
There is a lot of debate in the market place as to what are the best bidding tactics. Some bidders like to sit in the front of the room, others stand at the back. Some start bidding right from when the lot is offered, others get involved either halfway through the bidding or just as the property is about to be sold. Myself, I quite often stand at the back of the room and will start bidding when I feel the property is over the reserve and just before it is about to be knocked down. But it's really what you're comfortable with, and nobody really knows what the best bidding tactics are.
How can I put off the competition?
Putting off the competition can be difficult. Bear in mind that's what every bidder wants to do. One way though, which is sometimes used to the effect, is to do what is known as a jump bid. This is where you call out a bid way in excess as to what the auctioneer is asking. It's a demonstration to everybody in the room that you intend to buy this property and you've got the means to do it, but it doesn't always work and you may well find other bidders are as determined as you to buy the property.
How can I reduce the size of the auctioneer's increments?
With property auction craft, to reduce the size of auctioneers' increments, simply call out the size of the increment you want or give an indication. For example, give gestures that mean that you want to half the increment he's going up in. It's the auctioneer who will decide whether he's going to accept the change in increments or not, and he's under no obligation to accept your request for smaller increments.
What is bidding off the wall?
Bidding off the wall, or taking bids from the chandelier, as it is sometime known, is where the auctioneer bids on behalf of the vendor. He is, by law, allowed to bid on behalf of the vendor up to, but not including the reserve price or beyond it. In some cases, this may be extremely helpful for bidders, and let me give you an example. Supposing the property is coming up for auction, and there's only one person interested in bidding for it in the room. The reserve has been set at 100,000, and this bidder is happy to buy it at 120,000. The bidding starts at 80,000 pounds, and without the auctioneer bidding on behalf of the vendor, it would never progress beyond that. However, because the auctioneer will take bids or generate bids of 85,000, the bidder then goes 90,000 etc. It can end up where the bidder, if he wants to, can bid 100,000 pounds and secure the property on the reserve price. The result is that the vendor sold the property at reserve, and the purchaser has bought the property on the reserve price, less than what he was prepared to pay for. Without the auctioneer taking bids off the wall, this would never have happened.
How can I spot a bid off the wall?
Spotting bids off the wall is very difficult. The only real way of having a chance of doing it is by standing at the front and watching the audience. Bear in mind though, some audiences may number in excess of 8, and watching everybody's face when the auctioneer is taking bids could be quite difficult, and you can never be sure whether it's a genuine bid or one off the wall.
What should I do if I think the auctioneer is bidding off the wall?
If you feel that you are the only bidder in the room and the auctioneer is taking the other bids off the wall, you have basically two choices. You could not bid again, hope that the property then does not sell, and approach the auctioneer afterwards to try and secure and purchase the property either at the reserve or below it, or carry on bidding, safe in the knowledge that the highest bid he will accept from you will be the reserve price as he is not allowed a bidder at the reserve price or above it.
