People have all sorts of ideas for auction strategies, but what does and doesn’t work? Here are the most common auction strategies and how effective they are.
Strategies that don’t work:
- Gut instinct is a bad strategy at auctions. Leave your emotions and pride at home. The auction ideal boils down to who is willing to pay the most for item being auctioned.
- Hiding in the back of the auction crowd won’t do you any good. You must be present and seen to bid. Hiding at best prevents you from winning anything and at worst makes you seem like you’re weak.
- Waiting until the last second(s) to bid is a bad auction strategy. You don’t want to enter the bidding too soon, and you don’t want to wait to the last second either. You could end up with poor timing and lose, or even achieve nothing.
- Dressing to impress is another strategy that doesn’t work. Some people might consider how you dress or what you drive to be intimidating, but it’s not. The wealth of a person isn’t reflected by what they wear or drive.
- Avoid crazy bid amounts because you will achieve nothing. At most auctions, you will just look silly.
Strategies that might work:
- Avoid bidding on property until it’s on the market. Why would you bid on property that’s not up for sale yet? Auction agents are anxious for that initial bid so they can start building momentum. Don’t play into their hands. If the property appears to be of little interest and no bids are given, throw out a low bid and see what happens.
- Set an odd number for your limit. Most people set their property values in round numbers like $800,000. Consider making your limit something like $803,000 because sometimes that small amount can be the difference in winning or losing the property.
- Say the full amount of your bid. It pays to be clear and succinct at auctions. It makes you appear confident and allows everyone to hear the full amount you’re bidding.
Strategies that do work:
- Bid with confidence. The second someone bids against you, shout out your bid. This works because it makes your intentions known. They will know you’re serious, but not your limit, so they may hesitate to continue bidding. When bidders get quiet or hesitant, they are getting close to their limit, so keep bidding within your limit.
- Make a solid bid early to knock out weak bidders. Make a strong bid early on to eliminate less serious bidders. Leave ample room between your low bid and your final budget so you have some leverage and can get the property at the best price.
- Know the market value. It’s important to know the value of the property. Do some research before the auction to gain the edge. This is how you know where to set your limit and know when to quit if the bidding gets too high.
- Stick to your limit! Know the market and create the limit you are willing to bid. Stick to that limit no matter what. If you know the value, but the bidding goes above your limit, stop because then it’s no longer an asset you want.
- Know the auction process. Learn about the auction process when you’re a beginner. Go to auctions first to watch how everything unfolds. Get familiar with it in your region. This is one of the easiest ways to create a good auction strategy and avoid costly mistakes. Learn how to make a bid, what your bid means, and what kind of deposit is required if you win.
Essentially, you need to know what you want and what it’s worth, understand the auction process, be confident, and know and stick to your budget. These tips will help you be a winner, or at least to avoid costly mistakes.
This article has been supplied by http://www.thepaycalculator.com.au. This information is not intended as advice and does not take into account your personal circumstances. Always seek professional financial advice.