Four things to look out for at an auction

For the uninitiated, an auction can be an overwhelming experience.

There are a lot of auction tactics and tricks floating around – ask one person for their tips and the next will give you the opposite advice. Here are four things to keep an eye out for at an auction that could play to your advantage.

1. The competition 
   
   The auctioneer is the natural ring leader of the show, so it’s tempting to cast your eye towards them. But when at an auction, keep one eye on the other bidders. They’re your competition, so it’s what they do that really counts.
   
   
2. The numbers
   
   If you arrive at an auction and there’s only one other couple and the next door neighbours who have turned up for a sticky beak, you might be in luck. Fewer bidders may mean that there’s not much interest in the property which could give you the opportunity to snap it up. A big turn out might signal some tough competition, but it could just point to observational interest in the property, especially in the case of unique or trophy homes.
   
   
3. The “on the market” announcement
   
   This one’s a case of ears over eyes. Under quoting by agents means that you might approach an auction underestimating the price that sellers are willing to accept. Both Jonathan Chancellor and Barefoot Investor Scott Pape agree that the “on the market” announcement is the pivotal moment in any auction.
   
   
4. The “knockout” bid
   
   One of the keys to bidding well at auction is recognising your competitors’ tactics. Don’t be intimidated if another bidder suddenly jumps up the price when bidding has been slow. Remember your limit and don’t be afraid to bid conservatively. Olivier Stier of buyers agency OH Property group recommends setting your limit well before the auction. 
   
   "This price should be set the night before the auction and should be entirely independent of the likely level of competition on auction day or what other buyers may possibly bid," he says. "These are things which you have no control over and should not influence the price you are prepared to pay. "