Loudly lying about the apartment block planned next door, aggressively staring down the competition, renting an expensive car and popping anti-anxiety pills. These are just some of the tactics people are using to get an edge in the auction market.
As house prices surge, desperate buyers are increasingly digging into their arsenal of weapons, using dirty tricks, decoy bidders and intimidating body language, experts say.
Adding to the high stakes game, new figures from property value prediction site realAs.com show properties are selling at auction for as much as 22 per cent more than the quoted price.
CEO Josh Rowe says there had been some reduction in the much-maligned practice of underquoting after new laws were introduced in Victoria in May, and NSW in January 2016.
But data from April and May shows the practice continuing.
In Victoria, Greenvale was the state’s worst suburb for inaccurate quotes in April with prices an average of 22.3 per per cent higher at auction.
Eastwood topped the list in NSW with sales prices 22.6 per cent higher than the quoted price in May.
“There has been a movement down, but when properties are selling for 17-22 per cent over the quoted price, this just means home buyers waste their time and money, and are left heart broken,” Rowe says.
In South Australia and Queensland, where there are fewer auctions, sale prices varied from the quoted price by as much as 11.2 per cent and 17.2 per cent respectively for auction and private sales.
The will to win
Rowe says bidding at an auction requires skill, and buyers can’t underestimate the importance of having an ace or two up their sleeves.
“One of the most strong-willed people I know would not bid at an auction – she got a friend to do it,” he says.
“It’s important to bid aggressively, always bid straight back, don’t ‘um’ or ‘ah’, and even when it’s your last bid – bid like it’s not.”
Other tactics he recommends include pointing out costly repairs at open inspection, standing next to the auctioneer and facing the crowd, and knowing your price limit.
Victorian home buyer Fiona Brooke, 46, hit the auction circuit with her partner Kathryn this year, and quickly realised they needed to do their research.
“One agent emailed three auction videos of himself in action, and we got to learn all his little tricks and quirks beforehand, like the way he appeared to be closing the auction in a sudden rush,” she says.
When they finally found their dream home, Brooke dressed up “rich” and took a man to the auction masquerading as her husband to quash any prejudices about their buying power.
They knew a couple who even took a Chinese friend to an auction to fool people into thinking she was a foreign investor.
Veronica Morgan, principal of Good Deeds Property Buyers, said she has seen panicked buyers use knock-out opening bids, men aggressively staring down adversaries, and bids of $100,000 when the auctioneer only called for $50,000.
“Every now and then I come across a bidder who does what I do – make bids of odd numbers and varying increments to unsettle other buyers,” she says.
Buyer’s agent Miriam Sandkuler, of Property Mavens, admits to taking two Australian-born Chinese people to an auction.
But she says the most important tips were sticking to a price cap and getting a buyer’s agent or family member to bid to remove any emotion.
Real Estate Institute of Victoria acting president Richard Simpson says there is no such thing as too much research before an auction.
“It’s also important to set a budget that isn’t a round number (for example $606,000) as you’ll often find that other bidders stop at an even amount,” he says.
“In terms of bidding strategy, prospective buyers should break the bidding down into smaller amounts and bid quickly. This is to give other buyers the impression that you’re not going to stop bidding until you secure the property.”