Transcript
For most buyers, auctions are terrifying.
Fast, loud, and you always feel like you're one bid away from overpaying.I've been to hundreds of auctions. Some are over really quickly. Some start with fifteen minutes of awkward silence where nobody wants to bid first.
But the rules are always the same — and once you understand them, auctions stop being scary.
Auctions are unconditional. Once the hammer falls, you own it. No finance clause, no building and pest clause, no cooling off. You're committed on the spot. That's why preparation matters more here than anywhere else in the process.
The reserve price. This is the minimum the property will sell for on the auction floor. If bidding doesn't reach it, the property is "passed in" — it didn't sell. But the highest bidder gets first right to negotiate afterward, which can work in your favour if you're prepared. The thing to note here is that sometimes reserve prices are set artificially high in oder to drive post-auction negotiations in favour of the seller.
The deposit is due immediately. You win, you sign and pay on the day. Usually five to ten percent. Bidding eight hundred thousand? You need forty to eighty thousand ready to go.
You don't have to be there in person. You can bid by phone or have a buyer's agent bid for you.Now — the rules are straightforward.
The strategy is where it gets interesting.
Most people think auctions are pure luck. If someone has five hundred thousand more than you, sure, you're not winning that one. But most of the time, you're bidding against people with very similar budgets to yours. Which means how you bid matters.
Set your maximum before you arrive. Write it down. Agree it with your partner. Do not change it on the day.
Bid with confidence. Don't hesitate, don't pause to whisper, don't huddle with your partner between bids. All of that signals to the room that you're close to your limit.
Bid with your maximum in mind. If your limit is eight hundred thousand, structure your bids so you land on it cleanly. Bid in even numbers — you don't want to end up at seven-ninety-five and have to make an awkward five-thousand-dollar bid that tells the whole room you're at your ceiling.
Bid consistently. Same pace, same energy, same body language from your first bid to your last. You want the other bidders wondering how much more you've got — not sensing that you're about to tap out.Expect to lose. Most buyers don't win their first auction, or their second. That's normal. Don't get emotionally attached before the hammer falls, and definitely don't start photoshopping your furniture into the floor plan.
We've seen buyers get caught up in auction fever, bid twenty to thirty thousand over what the property is worth, and then the bank valuation comes back lower than the purchase price. The loan gets knocked back. Now they're scrambling to find the extra cash or they lose the deal entirely.
Auctions reward preparation, not emotion. Do the work beforehand and you'll be fine.
Key takeaways
- Auctions are unconditional. Once the hammer falls there's no cooling off, no finance clause, and no way out
- Set your maximum before you arrive, write it down, and do not change it on the day
- Bid with consistent pace and confidence, hesitation tells the room you're near your limit
