5 strategies to outplay auction mind games and win

“You want to give the perception that you have an endless supply of money that the person will just give up,” Ms Landrey said to Smart Property Investment.

In order to create that perception, property buying specialists give the following tips:

Bid odd

As bidders expect nice, round numbers, auctions can easily be thrown off if bids are made in odd numbers and different amounts. Comparison website Mozo said that doing so can “extend beyond the psychological price limits other bidders have set”.

Bid varied

For Ms Landrey, a good bid is one that is not the same amount as last time.

“My strategy is to let the bidding commence, and then to go up in different increments. So, if the opening bid is $1 million, I might bid $1 million and [$15,000], and say somebody comes back with $1 million and [$20,000], then I will go $1 million and [$40,000],” she said.

Interrupt when you can

Another strategy that works for Ms Landrey is to try and get in before other bidders, even if they’re literally in the middle of making a bid.

“That way, you’re showing that you’re the serious buyer and you want to give the perception that you have an endless supply of money that the person will just give up,” she said.

Do your homework

Going in blind can be a terrible idea, so you should research as much as possible on both the auctioneer and the market you want to buy into.

Every auctioneer is different; their pace, tone and the way they engage with bidders can vary greatly. If you can attend auctions in the lead up to the auction you plan to bid at, take the opportunity to observe your auctioneer and their particular style.

Mozo suggested: “Before going to an auction, you should [also] have an idea of what other properties have sold for in surrounding area[s] and how they sold (e.g. auction, private negotiation).”

Simon Pressley, head of market research at Propertyology, agreed, having as recently as last month purchased a property for his own portfolio.

“Pre-auction preparation included having immense confidence in my research about the outlook for the city, the changes flagged for the pocket that the property in question was located in, building/pest inspections and council searches were to my satisfaction, my finance was water-tight, and I’d completed a thorough appraisal to know what the property was worth,” he said to Smart Property Investment.

“Supported by such thorough preparation meant that I had no unanswered questions or doubts in mind about the property. During the auction, it’s a great feeling when you know you’re more organised than every other bidder and if your hand is the last one in the air when the hammer falls it will be because the final bid is less than equal to your pre-auction appraisal.

“It’s most unlikely that other bidders will have that same feeling of power.”

See and be seen

Turning up early gives you plenty of time to find a position that keeps your competition in clear sight, according to Mozo.

“Are they excited, agitated, serious or furiously consulting with their partner? By watching other bidders, you can gain crucial insight into what your next move should be.”

Other strategies for being successful at an auction include knowing the stereotypical kind of bidder.

“The reality is that no [two] auction[s] [are] similar, so be ready to change up your style based on the mood in the room. No matter what persona you take on when bidding, the best thing you can do is to enter the auction well-researched, calm and with a clear idea of how much you are willing to spend,” said Steve Jovcevski, a property expert at Mozo.

However, ultimately, there is no one strategy at auction time as effective as simply sticking to your budget, both Mr Pressley and Ms Landrey said. 

“Competitive instincts kick in at auctions, but ultimately, people are going to have their limits, and that’s where the price is going to end up. So, I don’t think people should necessarily get bogged down with a strategy for the auction as such,” Ms Landrey said.

“I think it’s more important to set your limits away from the auction floor, from an unemotional point of view, or without the environment of competition to make sure you’re not overpaying for the property within your budget.”

“I’m always prepared to pay right up to my maximum appraisal figure if required, that’s why appraisals are so important. But I literally will not pay a dollar more. I’m a professional investor. If an emotional owner-occupier or a less informed investor than me wants to pay a premium for the property, so be it,” said Mr Pressley