You will have seen this weekend’s auction clearance rates record. Melbourne’s clearance rate jumped from 69.2 percent last weekend to 79 percent this weekend. This is also a reflection of it being the first major auction weekend post the January holiday period.
With interest rates still low, for first home buyers, investors and upgraders in the market, it now appears as good a time as any to buy property. Especially in the lead up to the Easter period late April.
With many properties being sold at auction, I am often surprised when I bid on behalf of clients, that I am still bidding against buyers who have little to no understanding of the auction process or terminology.
I attended a property in St Kilda this weekend and primarily bid against one couple, to secure a two bedroom apartment for an owner occupier client. My client and I had met beforehand to clarify the limit to which he would spend, allowing left over funds for cosmetic renovation. He was aware of the pros and cons of the property and I had done research and due diligence to determine the true worth of the property, to ensure we didn’t overpay for it.
The bidding commenced and quickly reached the point where we were reaching our maximum price point. What was interesting is that I was bidding against a married couple, the wife being heavily pregnant. She was the person bidding while her husband stood close by, whispering feedback. Interestingly, she asked at one point if my bids were ‘vendor’ bids and the agent explained that I didn’t work with his firm and that I was representing my own client, so confusion was reigning. As bidding reached the reserve price and shot over it, her husband frequently instructed her to stop bidding, to which she continued pushing the price up, with no evident strategy re price increments or stopping at their limit. The agent successfully played on her emotions, and hormones no doubt, encouraging her to keep going to ensure she had a home in which to live in by the time the baby arrived. Luckily for the vendor it worked, with the couple securing the property in excess of what its intrinsic value was compared to similar properties in the marketplace.
In short, do research to understand the auction rules and terminology. Also, if you know you can’t manage your emotions, you most likely can’t manage your money very well. If there is likelihood that you will perform poorly under pressure, you may want to consider asking a family member to bid on your behalf or engage a professional Licensed Buyer Agent to act for you. While engaging a professional will cost money, it could in fact save you thousands of dollars in the long run.
At Property Mavens, it is our mission to find and buy you properties that outperform the rest. Miriam Sandkuhler is a Director and Acquisitions Specialist at Property Mavens and the Author of Property Prosperity – 7 Steps to Investing Like an Expert. Qualified as an Accredited Property Investment Advisor, with Diplomas in Property and Business Studies, Miriam’s experience as a Licensed Buyer Agent have given her the edge in sourcing and negotiating great property deals on behalf of her clients. For more information on how Miriam can help you find, evaluate and buy a great property and to receive a free copy of the e-Book, ‘Property Buyers Guide – The 7 Common Mistakes Property Investors Make’, visit www.propertymavens.com.au or you can contact her directly on 03) 9988 2266 or by email to firstname.lastname@example.org. To purchase a copy of her book Property Prosperity, visit www.Propertyprosperitybook.com.au