Property Hub - Investment Insights & Inspiration - Realty Talk: Mistakes many bidders make

Episode Date: January 21, 2023

It is always better to learn from the mistakes of others especially when it comes to bidding at an auction.  For instance – do you know why it is not a good idea to discuss budget with your partner during the auction or why it is not a good idea to heckle the auctioneer.  Buyers Agent Cate Bakos has learnt the hard way and she shares her experiences. RealtyTalk is part of the Property Hub podcast channel, your home for property investment insights, inspiration, and stories from Australia’s top property experts, investors, leaders, and analysts. Subscribe now to get every RealtyTalk episode delivered to you each week for free, and also get full access to Get Invested, the leading podcast for Australians who want to unlock their full ‘self, health, and wealth’ potential and get inspired by the stories of investors, founders, and entrepreneurs. Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by Realty.com.au, connecting buyers, sellers and agents differently. Some of the common mistakes that some bidders will make at an auction are things that, well, I guess a lot of people might think are very clever to do. But I'm going to give you some reasons now why they may not be all that clever. Kate Bacos is a very skilled buyer's agent. She bids on behalf of her clients, buyers, I guess every week of the year. And she joins me to talk about this now.

Kate, thanks again for your time. It's great to be on this show. I'm loving this series. Yes. And there's so much that we don't understand. And I think, too, that many people only ever go to bid at an auction once or twice in their lifetime. So it can be quite a daunting process. But you might have some people tell you, hey, here are a couple of good ideas.

We're going to give you, well, there's at least two that I've heard of that I would suspect many people would think is a good idea. We're going to tell you why. But there are three, in fact. And the first one is, I guess, a bit of a no-brainer, Kate, about not doing any research. Yeah. if you assume that the crowd will take the price to the right market level in some cases it will and if you win the auction you've won it for a thousand dollars more than the next person you've paid what some may say is market value but if that auction flies and you keep bidding with the intent

that you'll pip whoever the highest bidder is you could find that you're paying more than market value and the bank doesn't agree with the price you've paid so you could face a situation where you've got a valuation shortfall and you may not be able to complete the settlement the other risk is that if it passes in and you go inside you're flying blind when those agents are all standing around you trying to negotiate and I've never had a passing where I'm just dealing with one agent they swarm around you and they do make it tough. Yeah they certainly do so make sure you do your homework. The next tip that you've given me to talk about is heckling the auctioneer. You've got to be pretty skilled to do that but it also can be quite risky. Tell me why.

I think no amount of skill and experience would make me want to heckle an auctioneer even if I didn't like how they're running their auction I'd be really cautious about annoying them sometimes they might lose count or get a fact wrong and you need to be respectful in how you deal with that because at the end of the day the auctioneer controls the auction they have some strict rules that they're running it under and they can refuse your bid they can say to you I'm not taking any of your bids we're not dealing with you and so there are a few things that can cause them to do that it's usually intimidatory behavior and stopping people from bidding making a big scene at the auction but if you heckle an auctioneer enough and get under their skin

they will tell you that they won't take your bid so it's a dangerous practice and I always say to people at the auction the agents and the auctioneer are not your competition they're not your challenger the challenges are in the crowd so be as intimidating as you can within reason play by the rules bid strongly and make people think that you've got a lot more money than you do have but don't go picking a fight with the auctioneer because it can end horribly another tactic i've seen used and i like your advice on whether you think this is good and that is to try and disrupt the auction not necessarily by um you know heckling the auctioneer but by making statements about non-approved extensions or things that could be inhibiting the sale.

Is that a good idea? It's a hard one. Look, in all fairness, I've raised questions that are a bit of a Dorothy Dix question. That's when you plant a question in the crowd and you already know the answer. And that can be in a situation where I've done the due diligence and I know that the property has a fundamental flaw,

so I'm prepared to buy it, but I'm buying it at a budget that tolerates that flaw and I like to know that everyone else is aware of that flaw because if they're not I could be bidding against someone who's not aware of it and they've got a higher budget so if it means that I might want to have someone rethink their budget or rethink buying the property altogether there's a critical time at the auction where you can ask a question I've done it a couple of times but sometimes it can backfire I remember someone once asking about asbestos and that distressed um the the crowd a little bit but it was something that they were already aware of and the option is set forward and said madam we've already talked about the

asbestos with you i believe you had an asbestos report carried out yesterday so it it did make her look a little bit silly um and the other time i've seen someone um have it backfire was when a plane was going overhead and they asked about a flight path but for anyone from melbourne we were bidding in Essendon so you would expect it to have a flight path you you have a problem if you're bidding in Essendon and you weren't aware of planes yeah geez that's fantastic advice and the third one is one that I've got to say is pretty new to me and you're saying here a common mistake is discussing the budget midway through the auction with your partner why is that a mistake well we chatted about this in an earlier show on the series and if you show signs of weakness so

if you're turning around and chatting to your partner midway through the auction you are certainly showing your hand to your opposition bidders that you're at capacity or that you're at your limit you're rethinking it so they can smell blood and they can move in quickly with some really tough bids but also it puts you in a really precarious position because you're making a very significant decision under high stress and high pressure you've got a crowd of maybe 100 people staring at you you've got an auctioneer holding a Gavin Young at you and you might make a judgment call that isn't right for you. So you could go over your limits, you could pay too much

or you could miss it altogether for a price that in hindsight you're prepared to pay. So it's a bad idea making a significant financial decision in that kind of environment. Yeah, really good advice in this series for CoreLogic. Kate Bakos is our guest, Kate is a buyers agent in Melbourne. Kate, also we've got to acknowledge the fact that, you know, we say before you go to bid at an auction,

get to know how an auctioneer works. So how do you tell a good auctioneer? It's not necessarily measured on whether or not they sell properties. There are a lot of other factors that Kate will share with us next time when she comes back. Kate Bacos, thank you very much for your time. Total pleasure. Miss something in this week's show or want to catch up on past shows?

Do it anytime at realty.com.au where we connect buyers, sellers and agents differently. Thank you.