Posted by Stephen Lovison, Burgess Rawson Sydney
Auctions are exciting and adrenaline filled events. As like residential property auctions, some buyers of commercial investments have emotional connections to their ‘perfect’ investment property. Commercial property auctions can be highly competitive so no wonder they can be so intimidating! If you’re not quite ready to purchase, why not come along to the auction and see how they operate? Have some morning tea and introduce yourself to the Burges Rawson team, who are more than willing to assist you and answer any questions you might have.
Here are 8 tips to help you come out on top:
1. Arrive early
At a commercial property auction be sure to arrive early and survey the landscape. Touch base with the agent to see who else is there as a serious bidder on your desired property. This way you are prepared for your competition when it’s time for the property to go under the hammer.
2. Be realistic with your financial goals
Make sure you do your due diligence before the auction and know your limits on the day. This way you’re at less risk of buyer’s remorse by bidding over your limit and creating a financial strain for yourself.
3. Make the other bidders think you have deep pockets and no limit
In today’s strong market it’s vital to use the psychological advantage of projecting confidence. Your competitor’s don’t know your limits!
4. Be confident in your bids
Open the bidding high, close to where the reserve will be, the auctioneer will often guide you to a starting price which is often in range of the reserve. Make your follow on bids fast and assertive. By procrastinating or agonising over your next bid your competitor’s will take it as a sign of weakness and be encouraged to continue.
5. Call out your offer in full
Rather than just calling out the increases use the full amount. For example $3.2 million rather than $5,000. Many bidders are uncomfortable around whole numbers so use it to your advantage.
6. Be the highest bidder if the property is going to pass in
If the property seems to be about to pass in make sure you’re the highest bidder. This way you will have the first right to negotiate after auction.
7. Be prepared to miss out and walk away from the investment
Auctions are a competition and while no one likes to consider themselves a ‘loser’ it’s far better to walk away than to over commit to a property investment.
8. Don’t settle just for one
At a Burgess Rawson Portfolio Auction there will be multiple properties in your price range with similar returns. This allows you to have several opportunities to secure a quality investment on the day.