How to avoid getting emotional and bidding above your budget at auction
How to avoid getting emotional and bidding above your budget at auction.EndFragment
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Auction bidding can be very nerve wrecking, even for experienced property investors.
It’s a high-pressure situation and Frank Valentic knows this all too well having bid on the last eight seasons of ‘The Block’ as well as for many investor clients and first-home buyers.
We have seen an increase of purchasers bidding on homes above their budget by getting too emotionally involved. We have some handy tips to keep in mind if you are planning to bid at an auction.
1. Be prepared
Do your research and know your top price limit. If you feel well educated and have been following the market, spoken to professionals and know what level you can bid to, then this will help your confidence.
2. Understand the terms and conditions for the sale
At the beginning of the auction, the auctioneer will announce the conditions of sale, these will vary between each property ensure you are paying attention.
3. Recognise your emotions
How are you feeling on the day? Are you nervous? Are you feeling defeated from previous experiences? It’s good to be mindful with how you are feeling as this can trigger how you bid and affect your strategy.
4. Pay attention
The bidding process can go very quickly. It’s important to be clear minded and aware of what is going on. Being distracted at the end of the bidding process can mean you miss out or purchase above your budget. Keeping a keen eye on how the bidding increments are progressing will give you an idea of where the auction is heading. When you start bidding call out the full figure of your bid rather than just calling out the increment. This will help you to be sure at what level you are bidding at and keep you in more control.
5. Moral support
If you think you may get carried away with the process, it might help to bring your partner or friend for moral support. If you’re upfront and clear to them about your budget they may be your saving grace if you start emotionally bidding! It also helps to have someone to celebrate with if you do purchase on the day.
This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.