There’s nothing quite like buying a property at auction. Maybe it’s the adrenaline of outbidding the competition or the anxiety that comes with spending that many zeroes at one time, but auctions are definitely not for the faint-hearted. Regardless of whether you’re an astute investor or a first home buyer, auctions are guaranteed to get your blood pumping. We’ve put together six survival strategies to stop you from overspending at auction.

Know The Market

Auctions are designed to create a sense of urgency, so to avoid being hoodwinked in the moment – do your research. Go to as many auctions as you can to familiarise yourself with how they work and get a feel of the process. Understand what the market is doing by looking through recent sales results and watch where clearance rates are sitting.

Avoid Overbidding

Seems like an obvious statement, but when you’re a few bids away from owning your dream home, it’s not that easy. Auctions are intense; think 20 seagulls and one chip. Have a very clear ceiling and stick to it. An extra $10,000 might not seem like a huge deal at the time but it pushes all your costs up, especially stamp duty. It could also push your loan to value ratio (LVR) out and leave you with lenders mortgage insurance (LMI) to pay.

Use A Buyer’s Agent

Most nervous first home buyers stand out like beacons at auctions. This makes it easy for seasoned investors to put their confident foot forward and throw you off your game. There’s no shame in asking for help, especially when there are hundreds of thousands of dollars at play. A buyer’s agent will essentially bid on your behalf. As a professional, they’re not emotionally attached to the house and can read the competition to get you the best result. Or you can ask a relative to bid on your behalf, advising them of the maximum you can spend.

Be Prepared

Some buyers make the mistake of showing up to auction with a blank cheque and no formal pre-approval. Pre-approval is essentially your green light to bidding confidently. Knowing that your finances are in order and having your loan amount approved, gives you less chance of overspending or losing your down payment. Pre-approvals usually only last for a fixed period of time, so check before you bid.

Be Confident

There’s a lot of different theories on how to win an auction. Tactics aside, the most important fact is that you remain in control of how you bid. Some agents suggest waiting until the very last call to make your bid while others suggest opening the bid early. Whatever strategy you choose, make sure you head into the auction confidently. When you call out your bid, project your voice and use the whole amount, instead of saying ‘$550,’ call out the full ‘$550,000.’ Saying it loudly and clearly shows that you’re on top of the situation and can help cement your place in the race.

There’s Always Next Time

Auctions are a gamble and sometimes the cards just won’t fall in your favour. It’s completely normal to feel deflated after missing out. The stakes are generally high and for most first home buyers, emotions are too. There’s always going to be someone with a bigger budget than you, so if you find yourself on a losing streak, consider a change of strategy or engage a buyer’s agent.