House Auction Strategy

Pre-Qualifying

Once you feel you are ready to become a bidder, getting pre-qualified or preapproved for a mortgage loan is a prudent next step. Knowing how much home you can afford will be critical to determining how much you can safely bid on a property of interest. If you have set a firm cap on the amount you bid, you are less likely to get caught up in a bidding war that could push the price above your limit. Learn about all the costs involved, such as deposits and buyer's premiums, before making any bids. A buyer's premium is an optional 5 to 10 percent the auction house may charge if you hold the winning bid.

Experienced bidders will tell you that one useful house auction strategy is arriving at the auction early. Attending the auctioneer's introduction is crucial for knowing the format of the auction. Generally, the auctioneer's opening speech will include a welcome as well as other items of interest, such as properties that have been withdrawn, methods of bidding allowed, deposit amounts for winning bidders, what you will need to do if you are a winning bidder and so forth.

Auctioneers suggest that you sit directly in front of them when you are bidding on a property. Dress well, bid with confidence and stay near the auctioneer, keeping eye contact with him every time you make a bid. Often times, this is enough to deter other bidders from bidding any further. Make your first bid for a property noticeable, ensuring the auctioneer becomes aware of you. If a bidding war ensues between other bidders, wait it out to avoid the possibility of substantially raising the bid and overspending for a property.

The experts at Property Auction Calculator suggest a house auction strategy for winning, called the "jump bid." If the price of a property is significantly below your bid limit, make a jump bid by shouting out an amount higher than the auctioneer has presented. Frequently, this deters other bidders from bidding any further by indicating you are willing to always go higher than them. Experienced bidders sometimes try to reduce the final amount of their winning bid by attempting to lower the bid increments --- for example, lowering the auctioneer's $1,000 bid increments to $500 --- in the early stages of bidding.