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BIDDING AGAINST YOURSELF AT AN AUCTION · The Real Estate Show

• 0:00
  Speaker 1: Well, can we know how stressful auctions can be, right?
• 0:02
  Speaker 1: There's lots to consider, like what strategy you're going to
• 0:05
  Speaker 1: go in with, you know, what your budget is, like
• 0:07
  Speaker 1: what your competition is like, like all that sort of stuff.
• 0:09
  Speaker 2: I have a feeling you got that out of order
• 0:11
  Speaker 2: a little bit. It's like, have I got enough money?
• 0:13
  Speaker 3: Yeah.
• 0:14
  Speaker 1: What cash have I got? What have I got to
• 0:15
  Speaker 1: play with here? But bidding against yourself at an auction,
• 0:19
  Speaker 1: we've spoken about this on the show a bit before.
• 0:21
  Speaker 3: We have.
• 0:22
  Speaker 1: You know, we thought we'd dig down more on it.
• 0:24
  Speaker 1: Is it a good or bad idea? Is it something
• 0:26
  Speaker 1: that people are doing?
• 0:27
  Speaker 2: Yep.
• 0:28
  Speaker 1: And so Alec Brown, a man who's been around the
• 0:30
  Speaker 1: block a few times and then some, Sales Director and
• 0:33
  Speaker 1: award-winning auctioneer Ray White joins us. Alec, good morning.
• 0:36
  Speaker 3: Renee, Cam, how are you both?
• 0:38
  Speaker 2: Yes, we're good.
• 0:39
  Speaker 1: Thank you so much for joining us. Can you explain
• 0:41
  Speaker 1: this concept of bidding against yourself and when someone might
• 0:45
  Speaker 1: do that?
• 0:47
  Speaker 3: Absolutely. So at the end of the day, if we
• 0:49
  Speaker 3: pick it apart, an auction really is just a negotiation,
• 0:53
  Speaker 3: an open-air negotiation that happens between multiple parties or sometimes
• 0:57
  Speaker 3: you might find yourself in a position where you are
• 0:59
  Speaker 3: the only one registered to bid. So it is a
• 1:02
  Speaker 3: one-on-one negotiation and essentially bidding against yourself. It's been a
• 1:06
  Speaker 3: bit of a wives' tale out there in the marketplace
• 1:08
  Speaker 3: for a long time. You'd never do something like that.
• 1:10
  Speaker 3: It's not in your best interest and the seller has
• 1:13
  Speaker 3: to take whatever the highest bid is. Ultimately, there is
• 1:16
  Speaker 3: an expectation that the reserve price set by the owner
• 1:19
  Speaker 3: and sometimes by improving your bid, it's going to enhance
• 1:22
  Speaker 3: your chances of actually winning the day and walking away
• 1:26
  Speaker 3: with the property that you want to buy. Okay.
• 1:29
  Speaker 2: And so that's what we've heard before. So that's why
• 1:32
  Speaker 2: are some people saying that you shouldn't do this? Why
• 1:35
  Speaker 2: are they arguing against it?
• 1:37
  Speaker 3: Look, it's a great question, and I'm trying to figure
• 1:39
  Speaker 3: that out myself for years, actually. I mean, it makes
• 1:42
  Speaker 3: perfect sense, right? If it was an eBay auction and
• 1:44
  Speaker 3: there was no reserve, well, you'd have to be mad
• 1:46
  Speaker 3: to bid against yourself because there's really no point to it.
• 1:49
  Speaker 3: But I guess the agenda is that sometimes it's a
• 1:53
  Speaker 3: belief that, well, irrespective of the price, whatever the highest
• 1:57
  Speaker 3: bid is, that's surely a demonstration of the market. We've
• 2:00
  Speaker 3: seen it time and time again where the opportunity for
• 2:02
  Speaker 3: a buyer was there to negotiate and They haven't taken
• 2:05
  Speaker 3: that negotiation and ended up missing out afterwards when a
• 2:09
  Speaker 3: property transacts for a higher price, the price that they
• 2:12
  Speaker 3: would have paid at the time, but through the next
• 2:14
  Speaker 3: step of an auction process, if it hasn't sold, goes
• 2:17
  Speaker 3: to private treaty and you're increasing more competition. Okay.
• 2:20
  Speaker 2: And there are some pretty strict rules around this though,
• 2:23
  Speaker 2: isn't there?
• 2:26
  Speaker 3: Strict rules in the sense of... Like how many times
• 2:29
  Speaker 3: you can do it? Oh, limitless in that sense. So,
• 2:34
  Speaker 3: I mean, there will be a vendor bid function potentially
• 2:36
  Speaker 3: that an auctioneer might use. But ultimately, the agent during
• 2:40
  Speaker 3: an auction might come up to you and suggest that,
• 2:42
  Speaker 3: look at the level that you're at. It's close, but
• 2:44
  Speaker 3: you're going to have to improve on that bid. And so, theoretically,
• 2:47
  Speaker 3: I've seen some buyers in a situation where they've improved
• 2:50
  Speaker 3: their bid three or four times. The key thing is
• 2:53
  Speaker 3: they were able to reach an agreement between them and
• 2:55
  Speaker 3: the seller and the property was able to transact and sell.
• 2:58
  Speaker 1: Okay. In instances like that, can it be better to,
• 3:02
  Speaker 1: instead of upping your own bid, if it passes in,
• 3:07
  Speaker 1: then using that negotiation period straight after to try and
• 3:11
  Speaker 1: win the place?
• 3:13
  Speaker 3: Potentially.
• 3:13
  Speaker 1: Potentially.
• 3:14
  Speaker 3: I mean, I'll give you a great example. I bid
• 3:17
  Speaker 3: against my own self when I was purchasing my last
• 3:19
  Speaker 3: family home. And the strategy behind that, the decision that
• 3:22
  Speaker 3: I took was rather than letting it pass in and
• 3:25
  Speaker 3: potentially other parties being in a position to make counter
• 3:30
  Speaker 3: offers or compete for the property as well, I just decided, well,
• 3:35
  Speaker 3: I'd rather get it done under the hammer where if
• 3:37
  Speaker 3: we could reach that agreement, it was sold. That was it.
• 3:40
  Speaker 3: No second guesses, no changing of the minds. And so
• 3:43
  Speaker 3: You know, I'll walk the walk there as well as
• 3:45
  Speaker 3: talk the talk. I'm happy to bid against myself if
• 3:47
  Speaker 3: I feel like it's the best strategy that time because
• 3:50
  Speaker 3: I really wanted the home. I saw value and I
• 3:52
  Speaker 3: wanted to make it mine.
• 3:53
  Speaker 2: I was absolutely going to say that when we've got
• 3:55
  Speaker 2: an award winning auctioneer who's bidding against himself and that's
• 3:58
  Speaker 2: your strategy. You've gone in with that. It's well worth
• 4:00
  Speaker 2: listening to. Mate, what's the number one thing you should
• 4:03
  Speaker 2: consider if you're going to do this?
• 4:05
  Speaker 3: Look, probably like you were both just discussing a second
• 4:09
  Speaker 3: before is budget. Knowing what you're comfortable with, where you
• 4:13
  Speaker 3: see value yourself and making sure that, you know, your
• 4:15
  Speaker 3: finances have that alignment. That's the number one sort of rule.
• 4:19
  Speaker 3: Also thinking tactically, if there is competition amongst other parties,
• 4:23
  Speaker 3: sometimes that strategy of bidding against yourself just doesn't throws
• 4:27
  Speaker 3: an absolute spanner in the mindset of people and what
• 4:30
  Speaker 3: should ordinarily happen and take place and that it can
• 4:32
  Speaker 3: actually be a really strategic move to set yourself apart
• 4:36
  Speaker 3: from the rest of the buyers that exist in the marketplace.
• 4:39
  Speaker 1: Throw them off and make them nervous. It's all the
• 4:40
  Speaker 1: mind games, isn't it, Alec? We love it.
• 4:44
  Speaker 3: Any bit of competitive edge, you've got to find it.
• 4:46
  Speaker 1: That's it. I will love that you did it yourself
• 4:48
  Speaker 1: and can speak about it from personal experience and professional experience.
• 4:51
  Speaker 3: Thank you.
• 4:52
  Speaker 1: That was really interesting. Thanks so much for joining us.
• 4:55
  Speaker 3: Absolute pleasure, guys. Enjoy the weekend. Absolute cracker out there today.
• 4:59
  Speaker 3: It sure is.
• 4:59
  Speaker 1: You too, Alec Brown, who's sales director and award-winning auctioneer
• 5:02
  Speaker 1: at Ray White.