1 00:00:05,320 --> 00:00:07,920 Speaker 1: Welcome to the Property Pendulum, brought to you by Domain 2 00:00:08,119 --> 00:00:10,440 Speaker 1: and Fear and Greed, the podcast that tells you which 3 00:00:10,480 --> 00:00:13,039 Speaker 1: way the property market is going to swing and how 4 00:00:13,039 --> 00:00:15,120 Speaker 1: to make the most of it. I'm Michael Thompson and 5 00:00:15,200 --> 00:00:18,720 Speaker 1: I'm joined by Alice Saltz, national Property editor at Domain, 6 00:00:18,840 --> 00:00:21,440 Speaker 1: and I've got to say one of Australia's foremost experts 7 00:00:21,480 --> 00:00:24,880 Speaker 1: on all things real estate, known of course to audiences 8 00:00:24,960 --> 00:00:27,880 Speaker 1: right around the country for Work on nine including The Block. 9 00:00:28,240 --> 00:00:32,880 Speaker 1: Hello Alice, Hi, Michael, I Confession Time and just jumping 10 00:00:32,880 --> 00:00:36,479 Speaker 1: straight into it today. I love auctions. I think I 11 00:00:36,560 --> 00:00:39,920 Speaker 1: might have a bit of a problem. I borderline addiction 12 00:00:40,280 --> 00:00:43,480 Speaker 1: to auctions. There's just something about the drama of them 13 00:00:43,479 --> 00:00:47,000 Speaker 1: that just entirely sucks me in. If there is ever 14 00:00:47,080 --> 00:00:50,080 Speaker 1: an auction in our suburb or any kind of neighboring suburbs, 15 00:00:50,240 --> 00:00:52,159 Speaker 1: you can pretty much guarantee that I'm going to be 16 00:00:52,240 --> 00:00:53,880 Speaker 1: there just soaking it all in. 17 00:00:54,200 --> 00:00:56,440 Speaker 2: It is kind of like theater, isn't it. And even 18 00:00:56,480 --> 00:00:59,120 Speaker 2: the idea that people are standing on a street with 19 00:00:59,200 --> 00:01:01,720 Speaker 2: a cup of coffee in there hand, waking their hand 20 00:01:01,760 --> 00:01:03,800 Speaker 2: in the air and throwing out a number in front 21 00:01:03,800 --> 00:01:06,280 Speaker 2: of everybody which will end up being the biggest purchase 22 00:01:06,280 --> 00:01:10,000 Speaker 2: of their life. Today is sort of mind blowing, isn't it? 23 00:01:10,080 --> 00:01:13,440 Speaker 1: And especially when so many people are kind of naturally 24 00:01:13,520 --> 00:01:17,039 Speaker 1: introverts and you are being forced to put yourself out 25 00:01:17,080 --> 00:01:20,440 Speaker 1: there in the most public way possible making the biggest 26 00:01:20,480 --> 00:01:23,800 Speaker 1: investment you ever you'll ever make in front of everybody. 27 00:01:23,880 --> 00:01:27,000 Speaker 1: I just there is something there. There's honestly something really 28 00:01:27,080 --> 00:01:28,600 Speaker 1: bizarre about this. Isn't that what? 29 00:01:28,959 --> 00:01:31,960 Speaker 2: Yeah? And I think also, you know, usually we're quite 30 00:01:32,040 --> 00:01:35,480 Speaker 2: private about financial situations. You know, you don't rock up 31 00:01:35,520 --> 00:01:37,600 Speaker 2: to the kids basketball and ask the person next to 32 00:01:37,600 --> 00:01:40,479 Speaker 2: you how much do you earn? But suddenly you're next 33 00:01:40,520 --> 00:01:43,000 Speaker 2: to one hundred people in the street saying how much 34 00:01:43,040 --> 00:01:45,880 Speaker 2: you'll pay for a property for you and your family 35 00:01:45,920 --> 00:01:46,960 Speaker 2: to live in? Yeah? It is. 36 00:01:47,160 --> 00:01:49,680 Speaker 1: It is quite extraordinary. So today we are going to 37 00:01:50,040 --> 00:01:51,720 Speaker 1: we're going to take a look at auctions, and we 38 00:01:51,800 --> 00:01:54,040 Speaker 1: are going to go through a bunch of tactics that 39 00:01:54,080 --> 00:01:58,960 Speaker 1: you can use to win at auction. I suppose the 40 00:01:59,000 --> 00:02:02,760 Speaker 1: first question here, Alice, is really what is going on here? 41 00:02:02,840 --> 00:02:05,080 Speaker 1: Because we talked about it, it does feel like a 42 00:02:05,080 --> 00:02:09,400 Speaker 1: piece of theater, but it is a strategy. Buy sellers 43 00:02:09,480 --> 00:02:15,120 Speaker 1: and buy agents to essentially elicit the highest price possible, right. 44 00:02:15,440 --> 00:02:19,040 Speaker 2: Correct, And I think we need to remember the idea 45 00:02:19,080 --> 00:02:21,200 Speaker 2: of an auction really is that it is the most 46 00:02:21,520 --> 00:02:25,800 Speaker 2: transparent way to have a transfer of a property to 47 00:02:25,800 --> 00:02:28,800 Speaker 2: someone else. The idea is that it's in public. You 48 00:02:28,840 --> 00:02:32,840 Speaker 2: can see with full clarity the bidding process and how 49 00:02:32,960 --> 00:02:35,359 Speaker 2: much someone eventually pays for it. Now, the role of 50 00:02:35,400 --> 00:02:39,880 Speaker 2: the auctioneer, of course, is to heighten the emotional attachment 51 00:02:40,280 --> 00:02:42,160 Speaker 2: of the people at that auction. They're trying to get 52 00:02:42,240 --> 00:02:45,400 Speaker 2: people rusted onto it, thinking I'll do anything for this place, 53 00:02:45,880 --> 00:02:48,960 Speaker 2: and then to encourage competition to get the highest price. 54 00:02:49,280 --> 00:02:53,160 Speaker 2: That's the role the auctioneer. The buyer is there to 55 00:02:53,280 --> 00:02:56,880 Speaker 2: get the keys for the best price that they can. 56 00:02:57,320 --> 00:03:02,160 Speaker 2: So you have two very competing motivations for these main players. 57 00:03:02,520 --> 00:03:04,640 Speaker 1: We are setting up for a major clash here, aren't we. 58 00:03:04,880 --> 00:03:08,359 Speaker 1: Is it just about who has the deepest pockets, because theoretically, 59 00:03:08,680 --> 00:03:13,200 Speaker 1: going into an auction, whoever has the biggest budget should win. 60 00:03:13,880 --> 00:03:17,400 Speaker 1: In theory, that's not necessarily the case, isn't it. No. 61 00:03:17,560 --> 00:03:20,320 Speaker 2: I would actually argue the person who is the most 62 00:03:20,520 --> 00:03:25,360 Speaker 2: informed and confident can actually win the keys at an auction. 63 00:03:26,040 --> 00:03:29,560 Speaker 2: So the deeper pockets definitely help, but you'll see people 64 00:03:29,600 --> 00:03:32,920 Speaker 2: who don't have information required will be the ones that 65 00:03:33,040 --> 00:03:36,720 Speaker 2: waiver and often are unsure about what their bidding strategy is. 66 00:03:36,720 --> 00:03:39,400 Speaker 2: So that's why it's important to go into this fully 67 00:03:39,840 --> 00:03:43,600 Speaker 2: are primed for the fight of your life and fully 68 00:03:44,360 --> 00:03:47,800 Speaker 2: upskilled in information to really put your best foot forward. 69 00:03:48,360 --> 00:03:50,520 Speaker 1: And it's worth going back and having a listen to 70 00:03:50,600 --> 00:03:52,800 Speaker 1: our last episode about all of the things that you 71 00:03:52,800 --> 00:03:55,200 Speaker 1: should be researching before you are making an offer. It's 72 00:03:55,240 --> 00:03:57,320 Speaker 1: the same information that you should be taking into an 73 00:03:57,320 --> 00:03:59,760 Speaker 1: auction because it's those other things that are going to 74 00:04:00,200 --> 00:04:03,760 Speaker 1: form your decision and help you figure out exactly what 75 00:04:03,800 --> 00:04:05,240 Speaker 1: you are going to be able to bid up to. 76 00:04:05,440 --> 00:04:08,040 Speaker 1: Can I ask you a really I suppose it's it 77 00:04:08,080 --> 00:04:10,960 Speaker 1: feels like an obvious question or a basic question. But 78 00:04:11,040 --> 00:04:13,840 Speaker 1: where should you stand in an auction? Should you be 79 00:04:13,880 --> 00:04:17,080 Speaker 1: standing right in front of the auctioneer or should you 80 00:04:17,120 --> 00:04:19,359 Speaker 1: be standing I like to stand at the back so 81 00:04:19,400 --> 00:04:20,839 Speaker 1: that I can see everybody else. 82 00:04:21,320 --> 00:04:23,640 Speaker 2: They're kind of two ways of thinking about it. You 83 00:04:23,680 --> 00:04:27,200 Speaker 2: could take the sort of alpha position, stand right in 84 00:04:27,240 --> 00:04:31,200 Speaker 2: front of the agent and not look at anyone else 85 00:04:31,200 --> 00:04:34,280 Speaker 2: in that crowd. And that's the really sort of primal 86 00:04:34,400 --> 00:04:36,839 Speaker 2: situation of I'm going to intimidate the people around me 87 00:04:36,920 --> 00:04:39,440 Speaker 2: and let them realize I don't even care about what 88 00:04:39,480 --> 00:04:39,960 Speaker 2: they're doing. 89 00:04:40,120 --> 00:04:42,120 Speaker 1: I love the way that you're tiptoeing around the fact 90 00:04:42,120 --> 00:04:44,000 Speaker 1: now that I have just declared myself not to be 91 00:04:44,040 --> 00:04:46,520 Speaker 1: an alpha person that I am, I'm a beta or 92 00:04:46,680 --> 00:04:49,039 Speaker 1: whatever else. There is somewhere tucked away up the back, 93 00:04:49,200 --> 00:04:51,320 Speaker 1: just kind of hiding in the corner, watching everyone else. 94 00:04:51,360 --> 00:04:52,000 Speaker 1: But please go on. 95 00:04:52,600 --> 00:04:55,760 Speaker 2: I have also seen a technique employed where people will 96 00:04:55,760 --> 00:04:59,279 Speaker 2: stand next to the agent or behind the agent, because 97 00:04:59,279 --> 00:05:01,960 Speaker 2: of course you can stand anywhere. You could be sitting 98 00:05:02,000 --> 00:05:04,400 Speaker 2: in your car, as long as that agent can sort 99 00:05:04,400 --> 00:05:07,239 Speaker 2: of hear the bids that you're making, that's your prerogative 100 00:05:07,240 --> 00:05:10,719 Speaker 2: where you stand. Many people, though, like the idea of 101 00:05:10,800 --> 00:05:12,880 Speaker 2: standing sort of on the side. It's sort of like 102 00:05:12,920 --> 00:05:15,479 Speaker 2: a three o'clock or or a nine o'clock position on 103 00:05:15,520 --> 00:05:18,400 Speaker 2: a clock to where the agent is just to understand 104 00:05:18,400 --> 00:05:22,159 Speaker 2: what's happening around them. I completely understand that that. I 105 00:05:22,200 --> 00:05:24,240 Speaker 2: think it's important to watch where people are coming from, 106 00:05:24,279 --> 00:05:27,360 Speaker 2: watch body language of other buyers, watch how couples are 107 00:05:27,400 --> 00:05:30,800 Speaker 2: responding to you know, putting bids in that sort of thing, 108 00:05:31,200 --> 00:05:34,200 Speaker 2: but many people just want to also just think I 109 00:05:34,279 --> 00:05:36,120 Speaker 2: want all of that out of the way. I'm here 110 00:05:36,160 --> 00:05:38,440 Speaker 2: to do my job and I'll be solely focused on 111 00:05:38,480 --> 00:05:39,120 Speaker 2: that auctioneer. 112 00:05:39,839 --> 00:05:43,120 Speaker 1: You mentioned that the auctioneer's job and the agent's job 113 00:05:43,160 --> 00:05:46,919 Speaker 1: is to really kind of heighten that connection between the 114 00:05:46,960 --> 00:05:49,840 Speaker 1: potential buyers and the property so it feels like an 115 00:05:49,880 --> 00:05:53,480 Speaker 1: emotional kind of thing that they have to have it. 116 00:05:53,600 --> 00:05:58,760 Speaker 1: In that sense, is an on site auction going to 117 00:05:59,400 --> 00:06:02,800 Speaker 1: result in you paying more than say, an auction held 118 00:06:02,800 --> 00:06:04,320 Speaker 1: in auction rooms off site. 119 00:06:04,560 --> 00:06:07,280 Speaker 2: It certainly can do. I have to declare that Melbourne 120 00:06:07,680 --> 00:06:09,919 Speaker 2: is the auction capital of the world. We have the 121 00:06:09,960 --> 00:06:13,159 Speaker 2: most on site public street auctions of anywhere in the world, 122 00:06:13,160 --> 00:06:16,520 Speaker 2: which is quite incredible. Sydney is going more towards that 123 00:06:16,640 --> 00:06:19,400 Speaker 2: on site auctions and that is absolutely for that very 124 00:06:19,440 --> 00:06:22,920 Speaker 2: reason that you can see what you're buying. Arguably, when 125 00:06:22,960 --> 00:06:26,240 Speaker 2: you're in a boardroom or an office or something and 126 00:06:26,279 --> 00:06:30,840 Speaker 2: talking about you know, stretching yourself finantially probably some ludicrous amount, 127 00:06:31,440 --> 00:06:34,000 Speaker 2: it does change if you can't see that beautiful house 128 00:06:34,000 --> 00:06:36,040 Speaker 2: in front of you, or you can't see the value 129 00:06:36,040 --> 00:06:39,240 Speaker 2: that you're getting throwing around those bids feels a bit 130 00:06:39,279 --> 00:06:41,640 Speaker 2: sort of disingenuous. I suppose when you're on that street 131 00:06:41,960 --> 00:06:44,520 Speaker 2: watching what you're purchasing, it's a lot more I think 132 00:06:44,800 --> 00:06:45,719 Speaker 2: motivating for people. 133 00:06:46,040 --> 00:06:49,880 Speaker 1: Yeah, what about being there in person? Is it better 134 00:06:49,920 --> 00:06:52,960 Speaker 1: to be there in person as the bidder or can 135 00:06:53,000 --> 00:06:55,200 Speaker 1: you be on the phone? Can you kind of do 136 00:06:55,240 --> 00:06:58,479 Speaker 1: it online? I know that online bidding was kind of 137 00:06:58,480 --> 00:07:01,359 Speaker 1: more of a thing during the pandemic, but is it 138 00:07:01,480 --> 00:07:05,440 Speaker 1: still an option and is it a good strategy to consider? 139 00:07:05,880 --> 00:07:07,599 Speaker 2: Look, a lot of people get them I'm more dad 140 00:07:07,640 --> 00:07:10,040 Speaker 2: to do it, or there's often some sort of nice 141 00:07:10,120 --> 00:07:12,440 Speaker 2: uncle who sort of the bitter in the family. And 142 00:07:12,480 --> 00:07:15,320 Speaker 2: really it's because people just don't trust themselves to make 143 00:07:15,360 --> 00:07:18,640 Speaker 2: the right decision, or they worry that they will just overstretch. 144 00:07:18,680 --> 00:07:22,200 Speaker 2: They worry that they won't make confident bids. And I 145 00:07:22,240 --> 00:07:24,040 Speaker 2: think what they're trying to do with when people ask 146 00:07:24,120 --> 00:07:25,960 Speaker 2: that is to take that emotion out of it, to 147 00:07:26,080 --> 00:07:28,640 Speaker 2: say I need some one is to be completely pragmatic 148 00:07:28,720 --> 00:07:31,640 Speaker 2: and head first here without leading by the heart. So 149 00:07:32,000 --> 00:07:34,040 Speaker 2: anyone can do that for you. And that's why I 150 00:07:34,040 --> 00:07:36,360 Speaker 2: think a lot during COVID we definitely saw that move 151 00:07:36,400 --> 00:07:38,560 Speaker 2: to online auctions. It did exist prior to COVID, but 152 00:07:38,600 --> 00:07:40,760 Speaker 2: it was really or it had to be embraced during 153 00:07:40,760 --> 00:07:43,400 Speaker 2: that period. And there are many options that will still 154 00:07:43,400 --> 00:07:47,160 Speaker 2: offer an online facility And I think, I honestly think 155 00:07:47,160 --> 00:07:48,960 Speaker 2: whatever works for you. But I know that many people 156 00:07:49,040 --> 00:07:51,040 Speaker 2: enjoy the fact they could be on their sofa with 157 00:07:51,120 --> 00:07:54,680 Speaker 2: a mute button to actually sit with their partner potentially 158 00:07:54,720 --> 00:07:57,040 Speaker 2: on that sofa and make decisions in a much more 159 00:07:57,080 --> 00:08:00,440 Speaker 2: controlled and calm environment than Adam the street with the 160 00:08:00,440 --> 00:08:02,080 Speaker 2: whole world potentially looking at you. 161 00:08:02,480 --> 00:08:05,720 Speaker 1: I want to ask you about the actual bidding process 162 00:08:05,720 --> 00:08:09,160 Speaker 1: in terms of starting the bid and what kind of increments. 163 00:08:09,320 --> 00:08:11,720 Speaker 1: But before you do that, in terms of knowing the competition, 164 00:08:12,000 --> 00:08:15,239 Speaker 1: knowing who you're up against for this, can you find 165 00:08:15,280 --> 00:08:17,800 Speaker 1: out how many people have registered to bid or is 166 00:08:17,840 --> 00:08:20,440 Speaker 1: it just a case of looking around and assessing the 167 00:08:20,480 --> 00:08:21,840 Speaker 1: number of paddles in the crowd. 168 00:08:22,440 --> 00:08:25,640 Speaker 2: Well, we have different rules in Australia about even needing 169 00:08:25,680 --> 00:08:28,920 Speaker 2: to register to bid, so Victoria and Western Australia are 170 00:08:28,960 --> 00:08:31,160 Speaker 2: the only states in Australia we don't have to register. 171 00:08:31,800 --> 00:08:33,880 Speaker 2: So this is sort of mind blowing for people in Sydney. 172 00:08:33,880 --> 00:08:37,480 Speaker 2: But I could just rock up at any auction and 173 00:08:37,600 --> 00:08:42,679 Speaker 2: literally bid. Now the issue, of course, is that am 174 00:08:42,720 --> 00:08:46,160 Speaker 2: I qualified to be bidding financially? That is, and that 175 00:08:46,320 --> 00:08:48,880 Speaker 2: is the reason that many people are saying that the 176 00:08:48,960 --> 00:08:52,640 Speaker 2: laws should be enforced in Victoria and wa just to 177 00:08:52,679 --> 00:08:55,720 Speaker 2: take out this sort of volatility that can actually happen. 178 00:08:56,160 --> 00:08:59,200 Speaker 2: I hear probably once a month or so of someone 179 00:08:59,400 --> 00:09:02,199 Speaker 2: a property being sold to someone and then that person 180 00:09:02,559 --> 00:09:06,760 Speaker 2: not actually being qualified. And of course for that poor seller, 181 00:09:06,800 --> 00:09:12,320 Speaker 2: they've endured that whole campaign, the whole psychological rollercoaster, and 182 00:09:12,360 --> 00:09:16,400 Speaker 2: then they're basically back at square one. So to register 183 00:09:16,840 --> 00:09:18,720 Speaker 2: in other states, you do have to. It's a wonderful 184 00:09:18,760 --> 00:09:21,000 Speaker 2: rule to have that. You can definitely learn a lot 185 00:09:21,000 --> 00:09:23,480 Speaker 2: from how many paddles that there are there. But I 186 00:09:23,520 --> 00:09:25,880 Speaker 2: actually think it can also sort of almost increase the 187 00:09:25,880 --> 00:09:27,880 Speaker 2: competition because all of a sudden you can really sort 188 00:09:27,880 --> 00:09:30,840 Speaker 2: of see what's going on here. Whereas again in Melbourne 189 00:09:30,840 --> 00:09:32,559 Speaker 2: we see these quite a lot of people just rock up. 190 00:09:33,080 --> 00:09:34,679 Speaker 2: I think I haven't even walked through it, but this 191 00:09:34,720 --> 00:09:36,480 Speaker 2: looks great. I'm just going to throw my hand in 192 00:09:36,480 --> 00:09:41,719 Speaker 2: the air. It's bananas. But it happens so often it's 193 00:09:41,800 --> 00:09:42,480 Speaker 2: quite incredible. 194 00:09:42,679 --> 00:09:45,679 Speaker 1: Oh, the theater of that god, the drama I know. 195 00:09:45,960 --> 00:09:48,320 Speaker 2: And often though, just coming in left of field and 196 00:09:48,360 --> 00:09:51,160 Speaker 2: you just and you can often see these crumbling faces 197 00:09:51,520 --> 00:09:54,040 Speaker 2: poor first time by I'm just going, sorry, what the 198 00:09:54,040 --> 00:09:56,240 Speaker 2: hell has just happened? I've done so much due diligence 199 00:09:56,240 --> 00:09:58,800 Speaker 2: on this property, and this person has come in and 200 00:09:58,960 --> 00:10:01,839 Speaker 2: just swooped in and and they won the keys. 201 00:10:02,480 --> 00:10:06,040 Speaker 1: Let's talk bidding. Should you start the bidding? Should you 202 00:10:06,080 --> 00:10:09,560 Speaker 1: be the person who opens the bidding? If you really 203 00:10:09,600 --> 00:10:13,120 Speaker 1: want this place? Do you just do you embrace the confidence? 204 00:10:13,120 --> 00:10:14,640 Speaker 1: Do you just go you know what, I'm going to 205 00:10:14,760 --> 00:10:17,520 Speaker 1: lead right from the beginning. Bang, here's my opening bid. 206 00:10:18,320 --> 00:10:21,240 Speaker 2: I think of bidding as having two different techniques. You 207 00:10:20,760 --> 00:10:27,000 Speaker 2: go hard, go early, or become a silent assassin. So 208 00:10:27,240 --> 00:10:29,600 Speaker 2: the go hard, go early is throwing a hand in 209 00:10:29,600 --> 00:10:32,480 Speaker 2: the air and showing everybody knows that you're there making 210 00:10:32,480 --> 00:10:35,840 Speaker 2: that bid. Or do you wait and wait and wait 211 00:10:36,360 --> 00:10:40,880 Speaker 2: until the agent is literally saying going once, going twice, 212 00:10:41,480 --> 00:10:44,679 Speaker 2: and then you're that person who goes in then And 213 00:10:44,720 --> 00:10:47,439 Speaker 2: what that does is it means you're not even competing 214 00:10:47,480 --> 00:10:49,560 Speaker 2: with the volume of bids early, you know, I mean, 215 00:10:49,679 --> 00:10:52,520 Speaker 2: but that is a very distinct way of playing the 216 00:10:52,559 --> 00:10:55,520 Speaker 2: auction game. The other thing that people will often do, though, 217 00:10:55,720 --> 00:10:58,599 Speaker 2: is sort of do what's called a knockout bid, like 218 00:10:58,760 --> 00:11:01,120 Speaker 2: do a bid that is, you know, at the upper 219 00:11:01,200 --> 00:11:03,480 Speaker 2: end of your limit potentially just to be like to 220 00:11:03,520 --> 00:11:05,200 Speaker 2: get rid of all the people who are just there 221 00:11:05,200 --> 00:11:08,000 Speaker 2: to sort of have a bit of a crack. However, 222 00:11:08,120 --> 00:11:10,520 Speaker 2: you could argue that doing that means that are you 223 00:11:10,760 --> 00:11:13,240 Speaker 2: over paying for a property. So this is why I 224 00:11:13,240 --> 00:11:15,400 Speaker 2: think when you think about this pendulum of where the 225 00:11:15,440 --> 00:11:17,720 Speaker 2: market is at any given point in time, it's incredibly 226 00:11:17,760 --> 00:11:21,120 Speaker 2: important to understand am I in a hot market, a 227 00:11:21,160 --> 00:11:24,160 Speaker 2: cold market, or just sort of a steady market. 228 00:11:24,640 --> 00:11:28,680 Speaker 1: So that changes the approach significantly, doesn't it. If you're 229 00:11:28,679 --> 00:11:31,360 Speaker 1: at an auction where there is everything is a bit 230 00:11:31,440 --> 00:11:35,080 Speaker 1: quiet and there's just not much activity at all, you 231 00:11:35,120 --> 00:11:36,959 Speaker 1: are not going to come in with a knockout bid 232 00:11:37,040 --> 00:11:39,080 Speaker 1: and pay kind of at the upper end of what 233 00:11:39,160 --> 00:11:42,280 Speaker 1: you can afford because clearly the competition just isn't there. 234 00:11:42,200 --> 00:11:44,640 Speaker 2: Exactly, and that's the whole point of an auction. They're 235 00:11:44,679 --> 00:11:47,280 Speaker 2: trying to correct that competition, and what they're doing is 236 00:11:47,320 --> 00:11:49,640 Speaker 2: if you do the knockout, but you've just potentially wasted 237 00:11:49,840 --> 00:11:52,240 Speaker 2: tens of thousands of dollars when you didn't need to. 238 00:11:52,679 --> 00:11:55,000 Speaker 2: So I think understanding the market that you're in is 239 00:11:55,040 --> 00:11:59,640 Speaker 2: incredibly important, and the same way understanding economic contributing factors 240 00:11:59,640 --> 00:12:02,920 Speaker 2: that are not. For example, after the RBA meets and 241 00:12:02,960 --> 00:12:05,080 Speaker 2: if you go to an auction and have increase interest 242 00:12:05,160 --> 00:12:08,280 Speaker 2: rates and you've got to an auction that weekend, nine 243 00:12:08,320 --> 00:12:11,760 Speaker 2: times out of ten buyers are standing their arms folded 244 00:12:11,880 --> 00:12:15,560 Speaker 2: or hands in pockets. The mood is so different, and 245 00:12:15,600 --> 00:12:18,240 Speaker 2: I think that when interest rates start to come down, 246 00:12:18,559 --> 00:12:21,240 Speaker 2: you'll see the opposite take place. But people really go 247 00:12:21,320 --> 00:12:24,360 Speaker 2: in a much more offensive or defensive position, depending on 248 00:12:24,440 --> 00:12:26,239 Speaker 2: the climate and the market conditions. 249 00:12:27,800 --> 00:12:30,360 Speaker 1: Bid increments then we talked about kind of coming in 250 00:12:30,400 --> 00:12:33,199 Speaker 1: with a knockout bid or kind of starting with a realistic, 251 00:12:33,360 --> 00:12:37,640 Speaker 1: reasonable bid, kind of is there an optimal size for 252 00:12:37,679 --> 00:12:40,280 Speaker 1: your bid increments or is it again just I'm starting 253 00:12:40,320 --> 00:12:41,760 Speaker 1: to get the idea of it is a case of 254 00:12:41,800 --> 00:12:45,520 Speaker 1: reading the room and deciding you've got a competitor over 255 00:12:45,559 --> 00:12:47,800 Speaker 1: here who's kind of going up by small amounts, and 256 00:12:47,800 --> 00:12:49,400 Speaker 1: then I'm going to come in with a larger amount 257 00:12:49,400 --> 00:12:51,800 Speaker 1: and try and appear confident. God, there's a lot of 258 00:12:51,800 --> 00:12:52,720 Speaker 1: different ways to play this. 259 00:12:53,280 --> 00:12:55,080 Speaker 2: There is, and you have to be very mindful that 260 00:12:55,120 --> 00:12:58,679 Speaker 2: the agent is also trying to squeeze as much out 261 00:12:58,679 --> 00:13:03,280 Speaker 2: of you as possible. So they will often say, you know, 262 00:13:03,400 --> 00:13:06,240 Speaker 2: say you said five thousand or something, and the agent's like, 263 00:13:06,280 --> 00:13:08,400 Speaker 2: give me fifty, Michael, give me give me fifty to 264 00:13:08,440 --> 00:13:10,680 Speaker 2: the man and the bluetop over there, and then often 265 00:13:10,720 --> 00:13:12,400 Speaker 2: people just think, okay, yep, and then all of a sudden, 266 00:13:12,400 --> 00:13:14,240 Speaker 2: you've just paid forty five thousand more than what you 267 00:13:14,280 --> 00:13:17,280 Speaker 2: actually tended to bid to. So I think it's a 268 00:13:17,360 --> 00:13:19,920 Speaker 2: real tactic to be aware of that. An agent will 269 00:13:19,920 --> 00:13:22,560 Speaker 2: sort of direct you to say, will you give me 270 00:13:22,600 --> 00:13:25,160 Speaker 2: that one more or something, and that's that idea of 271 00:13:25,240 --> 00:13:27,560 Speaker 2: you need to really have your wits about you, do 272 00:13:27,760 --> 00:13:30,080 Speaker 2: some quick calculations and be like no, no, no, I'm only 273 00:13:30,080 --> 00:13:32,480 Speaker 2: going to offer you ten. And then so I does 274 00:13:32,520 --> 00:13:34,280 Speaker 2: offer you five thousand more than anyone, I'm only going 275 00:13:34,360 --> 00:13:37,280 Speaker 2: to give you five, like really knowing that it's in 276 00:13:37,320 --> 00:13:39,800 Speaker 2: your right to only offer what you want to without 277 00:13:39,840 --> 00:13:42,120 Speaker 2: them sort of eaching more out of you than what 278 00:13:42,160 --> 00:13:42,920 Speaker 2: you're willing to pay. 279 00:13:43,520 --> 00:13:46,319 Speaker 1: It does feel like you need a lot of confidence 280 00:13:46,440 --> 00:13:49,400 Speaker 1: going into this process because these are auctioneers and agents. 281 00:13:49,559 --> 00:13:52,079 Speaker 1: They do it every week. They do it every weekend. 282 00:13:52,160 --> 00:13:54,600 Speaker 1: They are experts in this that you need to go 283 00:13:54,720 --> 00:13:56,960 Speaker 1: in there quite sure of yourself. You need to go 284 00:13:57,040 --> 00:13:59,160 Speaker 1: in they're sure of the research that you've done. You 285 00:13:59,200 --> 00:14:01,200 Speaker 1: need to go in their shore or of your financial position. 286 00:14:01,320 --> 00:14:03,360 Speaker 1: And then you need to go in and just be 287 00:14:03,920 --> 00:14:07,560 Speaker 1: confident in the strategy that you are taking. And I 288 00:14:07,600 --> 00:14:09,319 Speaker 1: can suddenly see why there would be a lot of 289 00:14:09,320 --> 00:14:12,480 Speaker 1: people that would look for the nominated bidder within the 290 00:14:12,520 --> 00:14:14,920 Speaker 1: family or within their friends group, who are able to 291 00:14:14,920 --> 00:14:16,720 Speaker 1: do that with confidence completely. 292 00:14:17,040 --> 00:14:18,720 Speaker 2: And I think that's why when you're aware of what 293 00:14:18,760 --> 00:14:21,280 Speaker 2: agents are doing, like you know, for example, they do 294 00:14:21,360 --> 00:14:23,840 Speaker 2: this sort of form of storytelling, this idea of they 295 00:14:23,960 --> 00:14:26,840 Speaker 2: talk about the benefits rather than the features. So they 296 00:14:26,880 --> 00:14:29,280 Speaker 2: might say the features are this has got a wonderful 297 00:14:29,320 --> 00:14:32,040 Speaker 2: chef's kitchen is a feature, for example, But they'll talk 298 00:14:32,080 --> 00:14:34,920 Speaker 2: about the benefit being when you cook for your family, 299 00:14:35,000 --> 00:14:39,440 Speaker 2: you'll suddenly find yourself, you know, making living a culinary dream, 300 00:14:39,480 --> 00:14:41,520 Speaker 2: and your family will be harmonious and loving. Your children 301 00:14:41,520 --> 00:14:44,000 Speaker 2: will clear the table, and they'll pack the dishwasher. And 302 00:14:44,040 --> 00:14:46,840 Speaker 2: they sort of do this too to project on you 303 00:14:46,920 --> 00:14:50,440 Speaker 2: what could be possible, and that idea of also sort 304 00:14:50,480 --> 00:14:53,720 Speaker 2: of eliciting that more emotional attachment to the property, I guess. 305 00:14:53,840 --> 00:14:56,359 Speaker 2: But the other thing they do is also create urgency. 306 00:14:56,760 --> 00:15:00,000 Speaker 2: They'll try to drum up competition, to change the bidding 307 00:15:00,080 --> 00:15:02,200 Speaker 2: and the tempo of the bidding. And the other thing 308 00:15:02,200 --> 00:15:04,080 Speaker 2: they often do is if there's like two bidders and 309 00:15:04,120 --> 00:15:06,360 Speaker 2: a third joins in, they'll say and that there's three 310 00:15:06,400 --> 00:15:09,640 Speaker 2: of you, and the idea being there's social proof that 311 00:15:09,720 --> 00:15:12,800 Speaker 2: this is a great property. But just be very aware 312 00:15:13,080 --> 00:15:18,040 Speaker 2: of all those tricks being employed to ultimately shift your 313 00:15:18,040 --> 00:15:21,200 Speaker 2: positioning and thinking I should and will pay more for 314 00:15:21,240 --> 00:15:21,840 Speaker 2: this property. 315 00:15:22,440 --> 00:15:26,600 Speaker 1: It's extraordinary the science behind it, from the agent side, 316 00:15:26,600 --> 00:15:29,840 Speaker 1: from the auctioneer side. I remember once we were selling 317 00:15:30,280 --> 00:15:33,440 Speaker 1: a property at auction end. Look, we were listening from 318 00:15:33,480 --> 00:15:40,080 Speaker 1: a bedroom, and the auctioneer built the excitement so well, 319 00:15:40,360 --> 00:15:43,480 Speaker 1: it was incredible. There was so much theater, so much 320 00:15:43,600 --> 00:15:47,560 Speaker 1: drama around it. That was not a single bidder. There 321 00:15:47,600 --> 00:15:50,440 Speaker 1: was nobody there. You would not know that from listening 322 00:15:50,520 --> 00:15:52,960 Speaker 1: to the auctioneer from another room. It sounded like it 323 00:15:53,000 --> 00:15:56,440 Speaker 1: was just going gangbusters out there. But it just showed 324 00:15:56,440 --> 00:15:59,680 Speaker 1: to me the fact that auctioneers are very, very very 325 00:15:59,720 --> 00:16:01,560 Speaker 1: good at what they're doing, and that you need to 326 00:16:01,600 --> 00:16:04,360 Speaker 1: go into this process fully armed with all of the 327 00:16:04,400 --> 00:16:05,760 Speaker 1: knowledge and all of the strategies. 328 00:16:06,000 --> 00:16:08,760 Speaker 2: And that's why people will often just think, I'm too 329 00:16:08,800 --> 00:16:11,080 Speaker 2: emotionally invested in this. I'm going to outsource either to 330 00:16:11,480 --> 00:16:14,240 Speaker 2: a biased advocate or someone in the family. The other 331 00:16:14,280 --> 00:16:17,680 Speaker 2: thing is also be aware that agents will sometimes i think, 332 00:16:17,800 --> 00:16:21,120 Speaker 2: also understanding when you're looking at sort of what pricing 333 00:16:21,200 --> 00:16:24,240 Speaker 2: is around an auction, they can sometimes cherry pick the 334 00:16:24,320 --> 00:16:27,920 Speaker 2: data points that they're using. They'll say, you know, last year, 335 00:16:27,960 --> 00:16:30,280 Speaker 2: I saw this house down the road for double what 336 00:16:30,400 --> 00:16:33,160 Speaker 2: it's even on the market for today, for example, And 337 00:16:33,200 --> 00:16:36,880 Speaker 2: while that should most definitely be true, that again could 338 00:16:36,920 --> 00:16:41,000 Speaker 2: have been a very different environment for the selling where 339 00:16:40,840 --> 00:16:43,280 Speaker 2: we're in the selling cycle at that given point in time. 340 00:16:43,640 --> 00:16:47,000 Speaker 2: So be very aware of how quickly markets can change 341 00:16:47,000 --> 00:16:50,680 Speaker 2: and conditions can change, so that even though they're saying that, 342 00:16:51,800 --> 00:16:54,640 Speaker 2: you need to understand really what's going underneath the surface 343 00:16:54,720 --> 00:16:57,800 Speaker 2: of that market to ensure that is still valid today 344 00:16:58,080 --> 00:16:59,800 Speaker 2: the day that you're bidding for that property. 345 00:17:00,400 --> 00:17:03,360 Speaker 1: One more question on strategy, how important is it to 346 00:17:03,720 --> 00:17:06,480 Speaker 1: kind of know your limit and to stick to it, 347 00:17:06,720 --> 00:17:10,879 Speaker 1: but also not to discuss while you're in the auction, 348 00:17:11,320 --> 00:17:14,320 Speaker 1: because I suppose if you're wanting to appear confident and 349 00:17:14,359 --> 00:17:16,840 Speaker 1: that you know what you're doing, how much should you 350 00:17:16,880 --> 00:17:19,359 Speaker 1: be planning ahead of time as to your strategy or 351 00:17:19,400 --> 00:17:20,800 Speaker 1: is it something that you were going to have to 352 00:17:20,840 --> 00:17:23,640 Speaker 1: adjust on the fly in the room as you are 353 00:17:23,680 --> 00:17:26,760 Speaker 1: reading kind of the faces of the people who are 354 00:17:26,800 --> 00:17:27,720 Speaker 1: competing against you. 355 00:17:27,960 --> 00:17:29,960 Speaker 2: I think it's a bit of both. I think write 356 00:17:29,960 --> 00:17:32,520 Speaker 2: down what your strategy is, and that sort of is 357 00:17:32,600 --> 00:17:35,280 Speaker 2: your sort of compass on the day, I suppose, But 358 00:17:35,400 --> 00:17:37,159 Speaker 2: you do need to be aware of the sort of 359 00:17:37,400 --> 00:17:40,200 Speaker 2: environmental factors that are taking place around you at that point. 360 00:17:40,240 --> 00:17:41,800 Speaker 2: And that's why I like this idea of sort of 361 00:17:41,840 --> 00:17:43,640 Speaker 2: being able to watch the crowd a little bit more. 362 00:17:44,200 --> 00:17:47,280 Speaker 2: Nothing's better than having a couple nearby who are bidding 363 00:17:47,520 --> 00:17:50,119 Speaker 2: and you can almost hear them talking or the body 364 00:17:50,200 --> 00:17:53,480 Speaker 2: language of some one partner elbowing the other in the 365 00:17:53,560 --> 00:17:57,359 Speaker 2: ribs like bid, and you really realize that between them 366 00:17:57,400 --> 00:17:59,640 Speaker 2: both they're probably not even aligned, but one of them 367 00:17:59,680 --> 00:18:03,600 Speaker 2: wants more than the other. And you'll quickly soon find 368 00:18:03,640 --> 00:18:06,840 Speaker 2: out who's really wearing the pants, I guess, and ultimately 369 00:18:06,960 --> 00:18:10,160 Speaker 2: driving that, I suppose, but I think that's why it's 370 00:18:10,240 --> 00:18:12,120 Speaker 2: very important to be able to watch what's going on. 371 00:18:12,400 --> 00:18:14,280 Speaker 2: The Other thing I will mention is also about this 372 00:18:14,359 --> 00:18:16,800 Speaker 2: idea of not being too cagey. I think if you 373 00:18:16,840 --> 00:18:19,520 Speaker 2: hold your cards too close to your chest, you can 374 00:18:19,560 --> 00:18:23,080 Speaker 2: sometimes miss out quite quickly. Some people will say I'm 375 00:18:23,119 --> 00:18:24,399 Speaker 2: not going to bid, I'm not going to bid, I'm 376 00:18:24,400 --> 00:18:26,359 Speaker 2: not going to bid, and all of a sudden, exactly 377 00:18:26,400 --> 00:18:28,359 Speaker 2: what you talked about before, Michael, there was no one bidding, 378 00:18:28,400 --> 00:18:30,600 Speaker 2: so the house gets passed into someone who might have just, 379 00:18:30,840 --> 00:18:32,840 Speaker 2: you know, surreptitiously thrown the hands in the air and thought, 380 00:18:32,880 --> 00:18:35,280 Speaker 2: i'll have a crack here, have a bid. When that 381 00:18:35,280 --> 00:18:39,160 Speaker 2: gets passed in, the right of reply goes to that 382 00:18:39,280 --> 00:18:42,520 Speaker 2: bidder to come inside, which is a whole other conversation 383 00:18:42,560 --> 00:18:46,000 Speaker 2: because I would advise don't go inside, but the right 384 00:18:46,119 --> 00:18:49,600 Speaker 2: to buy goes to that highest bidder. So if you 385 00:18:49,680 --> 00:18:52,840 Speaker 2: were trying to play it cool and just think, oh, 386 00:18:52,880 --> 00:18:56,040 Speaker 2: I'll let this go and you've missed that opportunity, you 387 00:18:56,200 --> 00:18:58,200 Speaker 2: very well might miss out on the keys of that property. 388 00:18:58,280 --> 00:19:03,199 Speaker 2: So it's important to ensure that you're being discreet and 389 00:19:03,320 --> 00:19:05,560 Speaker 2: keeping cards close to your chest, not to the point 390 00:19:05,600 --> 00:19:07,640 Speaker 2: that you've shot yourself in the foot and actually miss 391 00:19:07,680 --> 00:19:08,400 Speaker 2: out on the property. 392 00:19:09,000 --> 00:19:12,080 Speaker 1: Don't go inside sounds like the tagline for a horror movie, 393 00:19:12,240 --> 00:19:15,760 Speaker 1: doesn't it. I'm so intrigued by this. We're definitely going 394 00:19:15,800 --> 00:19:18,600 Speaker 1: to have to follow this up in a future episode. 395 00:19:18,840 --> 00:19:21,440 Speaker 1: I think we've had plenty of good advice, both from 396 00:19:21,520 --> 00:19:25,520 Speaker 1: the things to be aware of from the auctioneer's side, 397 00:19:25,520 --> 00:19:27,679 Speaker 1: from the agent side as to the strategies that they 398 00:19:27,720 --> 00:19:29,919 Speaker 1: are using, and then hopefully a few good tactics that 399 00:19:30,000 --> 00:19:33,400 Speaker 1: you can use in terms of your preparation, and also 400 00:19:33,560 --> 00:19:36,159 Speaker 1: just things to do on the day to increase the 401 00:19:36,280 --> 00:19:38,240 Speaker 1: likelihood that you will be the one that walks away 402 00:19:38,359 --> 00:19:39,680 Speaker 1: with the keys in your hand. 403 00:19:39,680 --> 00:19:41,520 Speaker 2: Thanks very much, Alice, Thanks Michael. 404 00:19:41,840 --> 00:19:44,960 Speaker 1: That was real estate expert Alice Stalt's national property editor 405 00:19:45,040 --> 00:19:47,600 Speaker 1: at Domain, and I'm Michael Thompson. Make sure you're following 406 00:19:47,640 --> 00:19:49,920 Speaker 1: the podcast and we'll be back next week with another 407 00:19:49,960 --> 00:19:52,399 Speaker 1: episode of The Property Pendulum, brought to you by Domain 408 00:19:52,440 --> 00:19:54,720 Speaker 1: and Fear and Greed, the podcast that tells you which 409 00:19:54,720 --> 00:19:57,040 Speaker 1: way the property market is going to swing, how to 410 00:19:57,040 --> 00:19:57,720 Speaker 1: make the most of it.