The top 4 questions you should ask yourself before an auction

The top 4 questions you should ask yourself before an auction

If you want to have a better than average chance of success at auction, you really need to become familiar with the environment and psychology of auctions before the big day.

Auctions are a ‘pressure cooker’ of emotions and buyers need to be prepared, particularly if you want to stay in control. Put simply, auctions are highly emotional environments where a bidder's focus, reason and common sense can easily be lost momentarily costing them thousands.

Auctions are all about competition. You want to be a winner while at the same time, spending as little as possible – two things that are in conflict with one another. This is a situation where you have a group of people all wanting the same thing and in order to get it they need to psyche out, outsmart or outbid each other.

To prepare for this weekend’s auction, I recommend buyers ask themselves the following four questions:

Will I be able to keep a clear head when it's my money on the line? - Money brings up a lot of emotion for most of us. Even talking about money makes most people uncomfortable. For instance, it's considered rude to ask people how much money they earn, or how much they're worth – even if they're close friends. If you're going to declare how much you're worth in public, you'd prefer to be worth more than everyone else. No one wants to be shown up as a loser and poor as well.

Will I be able to stick to my limit and not bid even a dollar over my maximum price? - Most bidders will already have put some money into the deal. They've paid for the pest and building inspections, paid for a solicitor to review the contract and have their deposit ready to go. So they also have something at stake and the last thing they want to do is to see any of their money go down the drain?

Will I be intimidated by the other bidders? - Add in to the pressure cooker some peer pressure and you can start to see how quickly emotions can get out of control. When several people are in this state it can lead to a bidding frenzy. This occurs when buyers let their hearts (or egos) rule their heads.  We are conditioned and subconsciously programed from a young age to be a winner so when the hammer falls you will feel that you want to be holding the winning bid. It's not uncommon for such frenzies to result in a sale price above fair market value. This is what all vendors and selling agents hope for. Whilst these frenzies don’t happen all the time they do happen.

Can I project confidence and play my cards close to my chest on auction day? - Most buyers think they can play a poker game on the day, however after seeing the actions of hundreds of inexperienced bidders at auctions over the years it would be negligent of me not to advise you to hire a trusted third party to bid on your behalf. If there is even the slightest risk that you could get carried away or lose focus then you need to hire a professional or engage a trusted friend to bid on your behalf. It will literally save you thousands.


Categories: Auctions