Buyers urged to treat auctions like a typical negotiation

CoreLogic’s latest Property Market Indicator for the week ending 14 March 2021 found that there were 2,232 auctions held across the capital cities, the second highest number of weekly auctions over the year-to-date.

The higher volumes returned a preliminary auction clearance rate of 83.2 per cent, which was slightly lower than last week’s 84.5 per cent. Houses emerged as the preferred property type, with clearance rates above 80 per cent for the seventh consecutive week, the report noted.

In comparison, the same week last year saw a slightly higher 2,274 auctions, but only 65.3 per cent of the homes were sold.

Speaking on the latest episode of The Smart Property Investment Show, Right Property Group’s director Steve Waters told potential buyers to treat auctions like they would any other negotiation. 

“There’s no one strategy in an auction that you could carry through for everything. But most of all, know what your walk away price is. Have a hard limit, not a soft and a hard limit,” Mr Waters explained.

“Do your diligence beforehand, make sure your contracts are reviewed, that your finance is in place, and that you make yourself seen,” he said. 

The property expert highlighted his aversion towards “bidding wars”, noting the importance of understanding the property’s value prior to it starting. 

“Look, generally we’re trying to avoid or we are avoiding auctions. However, a lot of an auction result will be based on your diligence beforehand. And part thereof is finding out, as an example, how many contracts are out on the property, how many pest and building reports have been carried out. Because that will give us some direction on whether we actually throw our hat into the ring at auction or not,” Mr Waters explained. 

He also pointed to the importance of a buyer’s agent in this process. 

“The trick is, in my opinion, is to be the squeaky wheel with all agents. Not that there’s off-market opportunities, but you may be, at the least, getting the heads up on a potential property so that you can carry out your diligence and then make assertive decisions accordingly in very small periods of time,” Mr Waters concluded.