Anyone can put their hand in the air, right? So why hire a professional to bid at auction?
According to one such expert, it’s because buying real estate under the hammer is much more complex than simply bidding. It can also be a scary prospect for many people, especially for those who’ve never done it before.
Melbourne-based buyer’s advocate, Cate Bakos, says buying at auction requires carefully crunching data to settle on a limit, a clear auction day strategy, a cool head and even a bit of psychology.
Cate Bakos explains the auction bidding process:
And as with any other life skill, practice makes perfect, so experience matters.
So, she says, it makes good sense to hire someone who knows exactly what they’re doing.
Bakos says those who employ a professional to bid on their behalf generally fall into three categories – those afraid of public speaking, those who recognise they’re out of their depth and people who are time-poor.
“Why wouldn’t you hire a professional who does it several times a week? Who knows all the tricks of the trade and has the ability to get a result?” she asks.
First comes setting a limit.
“As a professional and experienced bidder, I always have a maximum figure established before I head to the auction,” Bakos says.
“The figure is based on a serious analysis of a property’s features and merits, it’s a combination of factors, including recent comparable sales, market sentiment, time of year and vendor motivation.
“I glean all information possible and then suggest a likely range to my client, so that a competitive limit can be set,” she says.
A professional bidder will figure out a maximum price with their clients. Picture: Getty
Bakos uses an ‘X, Y, Z’ pricing approach with her clients.
“The X figure is where it should sit, based on comparable sales data, Y is where you sit with competition and Z is the client’s stretch figure,” she says.
On auction day, a professional will be armed with a plan and call on all their experience to read the crowd, to outwit and outlast them all.
How to learn from auction mistakes:
“After over a decade of auction experience and 800 auction bidding assignments, I’ve learnt a lot about auction-bidder behaviour. Just because another buyer has a stronger budget, doesn’t necessarily mean that they will be the winning bidder,” she says.
“When I bid, I don’t refer to my clients. I don’t stop the auction. Nor do I take any liberties with additional bids over my approved limit. I bid strongly and strategically at the right moments, and my bidding increments are decided on at a moment’s notice, while I digest the mood of the key bidders at the auction.
“It is a game of confidence and strategy and the object of the game is to secure the property at or below the client’s limit,” Bakos says.
