It may well be an overused tag and we've all heard of them: those emotionally overwrought buyers (and sellers) who cave in to the high pressure situation of auctions (no wonder some agents love them so much) and pay more/sell for less than they ever intended. I've seen people cry, rant and rave in anger and jump for joy with happiness at auctions- it's quite a show at times- yet I come away from some feeling quite hollow for the people who missed out/never had a chance or for the sellers who were misled by the whole sorry campaign and believed that their house would receive much more or a better price. Even those of us with supposed nerves of steel would find it difficult when it's our home either side of that hammer.
I've successfully bought and sold at a few auctions, and missed out at many, and it is nerve racking as a buyer. Multiply that by 10 for the vendor. My view is that the #1 emotion to avoid is not irrational desire, the one you must avoid is regret. I've been to a few as a buyer where I was confident I would get it, had a limit I wanted to spend and had pre-approval for this limit. That is what the popular press will tell you is a good strategy for auction. IT IS NOT. It is a recipe for missed opportunity and regret. For an auction, particularly a PPOR, the right strategy for me has been 1) know your borrowing thresholds. What is the limit your current lender will give you? If you refinanced away what is the highest limit a tier 1 bank will give you? What about tier 2? 2) What is your "pain" threshold for servicing. Do not have a single figure, have a range from easy, uncomfortable, to BIG BRICK WALL. 3) With 1) & 2) researched decide on a "buying range" for the property, a single figure limit is absurd. (You'll notice I mentioned nothing about DD on the property itself, that's a given) At auction there's only 3 tips 1) only bid if and when you have to. No need to throw coal in the fire. 2) never EVER ask for a reduction in the bid increment. Once that happens there's blood in the water, you might as well announce "hey, I'm getting close to my limit everyone" 3) never bid against a VB If you miss out but have done the above, then you will not feel regret because at auction there is one chance and one only, never leave wondering ..... 'what-if'. Believe me, the feeling of shock at missing out, followed by the realisation a day or so later that you could have afforded the property, is not a happy place to be. Yay for auctions.
