Summary: Cherie Barber – Renovation Auction Tips Hey guys! This is Cherie from Renovating for Profit. So, you’ve been out doing your “Open for Inspections,” and you have got really good knowledge now on the properties in your suburb, and the prices. Now, you’re ready to buy your first un-renovated property. Fantastic! Now fortunately, you’ve just heard that the property that you’re interested in buying is going to auction. Unfortunately, auctions are one of those things in life that people absolutely freak about, they absolutely hate them. Here’s a couple of my very simple basic tips to help you on auction day: 1. First things first, you want to make sure you negotiate all your terms prior to attending an auction. You don’t do this after the auction; you don’t do it during the auction. It should be done at least three or four days prior to the auction because you need to take all of your terms that you have agreed in writing, to the auction and show them to the auctioneer if you are successful. So the two key things you want to negotiate are minimal deposit. Stop paying ten percent guys, at the very most five percent if not less. And what you want to negotiate is extended settlement. The more time you can get to organize your renovation in terms of getting quotes, lining up trellis, buying all your fixtures and fittings, doing your budgets and project plans, the better for you because it won’t cost you any money. 2. At auction your job is to slow down the bidding increments as soon as possible. When I have to attend an auction and buy property, what I’ll typically do is be the first person that throws in the bid, because otherwise everybody just stands around, looking at each other, I want the game over and done with. So I normally put in an offer. Don’t make a ridiculously low offer. (a) You’ll offend the auctioneer, and they will probably make you look silly. So put in a decent offer but not a crazy offer and your job is to slow down the increments system as soon as possible. So instead of bidding $20,000 increments, jump it down to $10,000 or $5,000 or whatever it may be appropriate to the property value. 3. One thing you never want to do is you never want to bid against yourself. Let’s say a property is on the market, the vendor wants $400,000 but the auction is actually stalled at, the bidding has stalled at say at $320,000. An auctioneer would normally do what’s called a vendor-bid, where they would put in a dummy bid. So for example in that instance, you’ve bid to $320,000 – nobody else is bidding, the auctioneer will exercise a vendor-bid, and that will try to exercise a vendor-bid closer to that $400,000 what the vendor wants. They might put in a bid that’s say, $370,000 or $380,000. Don’t ever go above that. So they will come back to you. Don’t ever go above that and bid say like $385,000. You’re bidding against yourself. That is crazy! So the best thing is to stay put, get the property passed in, because what it means is that the property will be passed in. It won’t be sold in an auction. And if you are the highest bidder, you’ll be given the first right of refusal to go in to their property and try to negotiate the price that you and the vendor are happy with. I hope these handy little hints help you in the next auction that you need to attend. I’m Cherie Barber, see you again soon!
