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Auction is by far the most popular method for selling properties in cities right now, and to a degree, this has also spread to regional areas, where auction numbers have been strong. There are a lot of reasons agents recommend auction and owners accept, the most important of which, is that auction is a highly successful strategy for a property owner.

Auctions are unique, in that they pit potential buyers against each other transparently, and let them fight it out to see who has the best auction bidding strategy. In a private treaty sale, you can make an offer, but you don't know how many other people have made an offer and what figure they have put forward. When bidding at auction, you not only know exactly what is on the table, you are standing right next to the people who offered it.

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Auctions bring out emotion based on our attachment to a place and often, our desire to get the hunt over with, but they also bring out a sort of primal urge to win. These people are your completion, they want what you want, and they are the only people standing in your way.

Despite not being in one room, Sale Ezy still generates that same sort of competition and tension, and in fact, not being able to see your opponents and read their body language, drives up those stakes and allows bidders to be much more strategic.

Regardless of whether you are competing in a standard auction or one online, strategy is important. Going into an auction with no thoughts on how you'll bid and what approach you'll take to knocking out competitors will likely just leave you with a bad case of the bidder blues.

So, what are some of the best tried and tested auction bidding strategies?

1. Knock out the competition with an aggressive auction bidding strategy

All auctions are different, not only for the auctioneer, but also for the bidder. For an auctioneer or owner, auctions differ due to the property, the type of bidders involved, the shape of the market. For bidders, experience plays a big part in how auctions evolve for them. For an inexperienced bidder or first home buyer, bidding at auction can be intimidating; but leave the fear at home, an auction demands strength and conviction.

As a first home buyer you have no doubt already experienced attending auctions where the very first bid knocks you out of the park and you're no longer in the running. If you haven't experienced this, be prepared, you likely will. But there's one way you can avoid that situation — and that's to be the person who is doing the knocking out.

A strategy commonly employed by aggressive buyers, knockout bids send a clear message. The message is that you know what you're doing, you know the value of the property, you have the money and you intend to buy.

Put simply, this strategy just involves watching a few starter bids be put forward, sticking to the interval the auctioneer has selected, maybe five or ten thousand, and then, coming in strong with a bid that doubles or triples the interval and takes the bid to a whole new level.

As an example, we recently watched an aggressive bidder stand back as three or four bids came in to start off the auction, letting bidding on a property worth $1 million get up to around the $875,000 mark. Then he swooped. He came in strong and unwavering with a loud bid of $950,000. And while that bid didn't win the auction, it saw plenty of bidders shake their heads and turn away, out of the race, which left him the prime opportunity to close out the bidding and purchase the house.

2. Don't be afraid to set your limit at a number that isn't round

Most people set their limit at a nice, neat number, "We will not go above $700,000", or, "$1.5 million is our absolute maximum." This is often the case whether they are bidding on their own behalf or they have given a limit to an agent who is bidding for them.

There is no harm in following the auction along at the nice round numbers the auctioneer likes to receive. Let the bids flow at that easy five or ten thousand dollar interval, but as things slow and the auctioneer is unlikely to get more bids, try a few numbers that aren't round, to minimise the extra you have to offer in order to win.

For example, if the bidding is at $790,000, there's a good chance at least some bidders will have set their limit to $800,000. Throw in a bid of $803,000 to put everyone off their game, take it over the limit, but not have to fork out enough to make it a round number in order to purchase.

3. Be quick and persistent

Are you serious about buying this place, do you want it? Then don't back down. An auction is as much about the actions and determination behind the bid as it is about the figure put forward.

A good strategy for bidding at auction, is to avoid hesitation and to counter-bid straight away — to always be in front. This idea of firing off bids with no hesitation confirms to the other bidders that the bid is nowhere near your limit as you don't even need to stop and think about the number (even if it is drawing near to your limit in reality) and that you have no plan to back down anytime soon. This is another aggressive stance and can really pay off!

4. Read the room and play it smart when bidding at auction

There is so much more going on in an auction room than just the bids, and if you can read it, you can be so much more competitive and have a greater chance of winning. Some things to look out for and consider are:

  • The number of bidders. Walk around the room and look at people and tune into their conversations, it will become quickly apparent who is serious and who is not, meaning you can get an idea of the size of the playing field.
  • Limits of bidders. Likewise, standing in the right spot can give you all the information you need. Bidders will often talk to each other about strategy before the auction starts, and some will even talk or argue about their limit. A little strategic listening can give you some great insights and let you know who you need to watch for and who isn't a real contender.
  • Body language. During the auction, watch the other serious bidders as each bid is made. Their body language will tell you if the bid is close to their limit, over their limit or if they have more in the bank.
  • Bluffs. Some bids are bluffs, a bit of a 'Hail Mary', one last shot at knocking others out of the competition. Watching bidders closely throughout the auction will show you their 'tells' so you will know when they are bluffing and they are running out of steam.
  • In an online auction, a little strategic thinking can also help. Watching the pattern of bidding from certain bidders will tell you what their strategy is. So they waited and then came in high, they're probably using a knock out strategy. They're in it all the time, maybe a quick counter-bid strategy. Watching this and noting things like slight hesitations can give you all the insights you need, you don't even need to hear the conversation about limits to know they are talking about it!

5. Control the auction pace

Auctioneers won't like this one, we know, we have some on our own team and they immediately frowned upon reading it! An auctioneer is seemingly in control of the proceedings of an auction. Other than submitting bids which they can't control, their voice, tone and speed control the pace of the auction, the level of tension and how people feel — so what if it's too fast and you need a little time to think? Throw them a curve ball or two (in a friendly way of course).

If the auction pace is just so fast you are struggling to keep up and you feel uncomfortable getting involved because you're not sure you have time to think and bid, make a few odd numbered bids that challenge the auctioneer's mathematics skills. Most bids will be round numbers, so throw in a $16,000, followed by a $13,000, or similar odd bids, and say the amount of the bid, not the new total. This will not only give you a few minutes extra to breathe while they add, but will also put other bidders off their game.

In an online space, this may confuse other bidders and make them stop to wonder what your strategy is. No matter the environment, it can help you achieve a few minutes breathing space and make your strategy less transparent and obvious.

Auctions aren't the easiest experience for a bidder, and they're not mean to be. The most important thing to remember, is they are used for a reason, to build momentum. This momentum can absolutely be used in your favour, to take out competition, but always remember the limit you have set, leave emotion out of it and be smart in how you apply the auction bidding strategy you have selected.