11 tips to avoid becoming spring auction pushover buyers

There's a well versed property adage that the greater the supply, the weaker the sales success. But with 640 plus Sydney listings, the past weekend was the second busiest of the year and its preliminary clearance rate was a very commendable 84% success rate.

That’s about 100 short of the biggest super Saturday which was in 2010, according to my recollections of the weekly Australian Property Monitors tally.

Sydney’s inner west was again the most popular region with 100 offerings and then the highest clearance at 89%.

It was a busy weekend in Mosman with 16 listings followed by Randwick with nine offerings. There was mixed success especially at the top end.

The known Mosman sales ranged between $625,000 for a two bedroom unit and a four bedroom house at $1.55 million.

But one of the pricier Mosman homes not to sell was offered by former Network Ten chief executive, Grant Blackley and his wife, Nicole, who are downsizing.

They bought the Medusa Street property in 2005 for $3.35 million when he was running Channel 10 and now after its renovation into a five bedroom house they were seeking $5.5 million plus. The home was actually his predecessor's house, the abode of the then retiring boss of the network, John McAlpine and his wife, Judy.

Over at Randwick the fashionista Lisa Ho 's four bedroom Randwick residence, Silverton was passed in at $2,675,000.

It had $3 million plus hopes prior to its auction through McGrath agent Adrian Bo - and has since been given a $3 million asking price.

It was initially listed for sale in 2011 with hopes of more than $4.5 million.

Lisa Ho bought the freestanding, circa-1884 Italianate residence in 2010 for $4 million directly from interior designer Ros Palmer.

Woollahra had the weekend's highest result when a Luigi Rosselli-designed Woollahra home sold under the auction hammer for $7.13 million - at $130,000 above reserve.

Then the second dearest was a $3.788 million Tennyson Point riverfront 1950s fibro property that sold to a family that spends most of the year in China. It went for almost $500,000 above the reserve with 13 registered bidders.

The weekend's cheapest sale was $150,000 at Auburn. It sold at $65,500 in 2001, and a decade earlier at $64,500.

Elsewhere in Auburn LJ Hooker sold 42 Park Road for $725,000 which was $125,000 over reserve, according to Rocky Bartolotto, the chief  auctioneer at auctionservices.net.au

He also reported 10 Grand Ave, West Ryde was sold at $1,410,000 which was $210,000 over reserve by Green Real Estate and 10 Flagstaff St, Edensor Park was sold at $523,000 which was $125,00 over reserve with 36 registered bidders taken by Raine & Horne Liverpool.

The Saturday Daily Telegraph captured the occurance under the headline -  Sydney properties kill reserves in first fortnight of spring.

The Telegraph’s analysis of  50 sales in the past fortnight revealed more than $61.5 million worth of property changed hands at $6.46 million above the price guide - or an average of $129,200 a property. Maybe these buyers are cashed up. But if not, it would be interesting to sit in on their discussion with their broker or banker, as they surely wouldn't have been as extravagent with their calculations. 

There are plenty of current casualities from buyers in past recent price peaks - especially the early 2010 buyers - who having seriously overpaid are faced with either taking a lower resale price or many more years in the market before they can resell at their entry price.

There are about 560 auctions over each of the next two weekends, leading to a dip on the October long weekend.

My 11 tips for wise auction bidding include:

Never sit in the front row or with your back to the crowd. Take a corner position so you can survey all your competition.

Prepare with extensive research and due diligence starting by checking all the recent sales results in the suburb so you gain an accurate market value estimation of your desired property.

It’s wise to research the prior sales history of the house or unit, along with its recent on-the-market history. Its helps to know if it’s been previously marketed or passed in at unsuccessful 2012 or 2013 auction.

It’s a good idea to find out what you can about the vendor's circumstances as this could be useful in your approach before or after the auction.

Given its most likely been some years since your last, its best you get an idea of how auctions work by attending a few.

Getting your finance ready with lender pre-approval before attending the auction is wise as if you are the successful bidder it will be an unconditional sale with no cooling off.

Setting a price limit is wise based not just on calculating what you can afford, but also common sense. Having a slight buffer is also worth considering, but not going in over your head and paying too much in the intensity of the auction.

By the time the auction comes around, you should have the contract checked by your conveyancer or solicitor, along with pest and building inspections.

One tactic is not bidding until the reserve is revealed by the auctioneer when the auction is well underway, although its not necessarily going to yield the prize. Bidding after what you sense as being the final vendor bid makes sense as it allows you to be in the box seat to negotiate with the agent. But don't rush into the negotiating room, hover to actually see who else was interested in the offering as they exit.

Never let the listing agent know what is your upper spending limit, so keep your cards close to your chest.

Confident bidding can work, but not bidding bullying. Quick reply bids can keep put pressure on other bidders, but slow bidding can equally yield the result too. It really depends on the specific circumstances of each auction and the bidding tone.

And to try to avoid the pressure a smart pre-auction offers can work by avoiding the looming competition and the owners might just been motivated to sell quickly as they have bought elsewhere and may just well agree to an offer beforehand to minimise their own stress.