Top buying tactics to help you score your dream home

In a challenging market for buyers, knowing the tricks of the trade and how to use them in your favour could be the difference between scoring your dream home, and not.

‘Sold!” As the auction hammer lifts up for the start of the spring selling season, this is what anyone bidding at a home auction wants to hear in their favour.

While the market has been tough for buyers in many areas of Australia, generating strong competition at auctions, this is about to change, says auctioneer and real estate coach Tom Panos.

“I expect in September, October and November that buyers will have one of the best periods in recent times to buy.”

For many prospective home buyers though, even with a market more in their favour, attending and taking part in an auction can be daunting, especially if they are new to the game. A way to get on top of this is for bidders to get to know the tricks and techniques used by auctioneers and agents in order to apply pressure at auctions.

It’s a challenging market for prospective buyers. Picture: Daily Telegraph/ Monique Harmer

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PLAYING ON BIDDER’S EMOTIONS

One of the most common tactics auctioneers employ is playing on the bidder’s emotions, says Rich Harvey, buyers advocate and CEO of Propertybuyer.com.au.

“Auctioneers like to create an emotionally charged atmosphere and sense of urgency to get bidders to compete among each other,” he says. “They particularly play upon your emotions and the potential sense of loss from not bidding to secure the property.”

Emotive pleas like, “It’s only money” and “It’s just going without a cup of coffee per day for a year” are often whispered into your ear in an attempt to convince you to bid more, says Cate Bakos, president of the Real Estate Buyer’s Agents Association of Australia.

“They may also try to tell you that the other bidder is close to their limit,” she says.

“They could be encouraging you to bid a little higher in order to help them reach reserve and place the property ‘on the market’. They may be telling you that the price is a bargain price, and hence planting a seed of doubt about the price that you thought represented market value.”

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BUYING TIME

Another common strategy that is often used when an auction is slow or stalls, is buying time. “The sales agents typically walk around the room or crowd and speak to the registered bidders encouraging them to make a bid and participate to get the auction going,” Harvey says.

This time delay tactic can also be used nearer to the finish line, something known as a “false finish”. “The auctioneer is typically very skilled at using the ‘going once, twice …’ to get people to put in a bid but there will be many false finishes like this before the hammer actually falls,” says Harvey.

KNOW THE AUCTION RULES

Richard Whitten, home loan expert at Finder, says that before attending an auction it’s important to know the rules.

“Buyers might be surprised to find, in the middle of the auction, that the vendor suddenly makes a bid. Vendor bidding means the seller wants to take the price higher. It’s a tactic that might catch buyers off guard.”

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While understanding the tips and tricks to avoid falling into these traps is helpful, the best way a buyer can prepare for an auction, Whitten says, is by doing research into both the auction process and the property they are interested in.

Auction readiness advice from the experts:

● Research comparable sales – relevant and recent sales in the local area – so you know

the true current market values.

● Get your pest and building report ready and reviewed, and know what you are buying.

● Ensure finance is approved and you have the deposit in clear funds ready to pay on the day (not locked away in a term deposit account).

Preparing well for auction is your best chance of success. Picture: Daily Telegraph/ Monique Harmer

● Prepare emotionally – keep emotions in check.

● Check out as many auctions as you can beforehand to get used to the process.

● Bid with confidence (don’t be concerned or consult with other people and don’t get confused by the numbers).

● Always get a contract reviewed prior to the auction – remember that auctions are unconditional and there is no cooling off.

● Set your limit before you step foot into the auction room or backyard of the house.

● Know your walkaway price.

Originally published as Top buying tactics to help you score your dream home