Veronica Morgan is a Residential Property Expert and Buyers Agent, as well as the Co-founder of the Home Buyer Academy, a course built to provide first-home buyers with affordable access to expert advice. She is also the host of two television shows including ‘Location, Location, Location Australia’.
In this episode, Veronica is sharing more of her top tips for bidding at an auction. She’ll break down the steps of what happens on auction day, as well as how to stay calm in the heat of an auction. Plus, she’ll share her best advice for how to maximise your chances of success on auction day.
Veronica also has a special deal for listeners of The Home Run on her book, “Auction Ready”. For more tips and tricks on getting ready for auction, go to www.getauctionready.com.au and use code ‘homerun30’ at checkout for 30% off plus free postage.
This episode is part one of a two-part chat with Veronica. Join us in the next episode to hear more of Veronica’s tips about bidding at an auction.
Get in touch with Veronica Morgan
Founder and Principal of Good Deeds Property Buyers
Co-host of the popular series “Location Location Location Australia” and also “Relocation Relocation Australia” on Foxtel’s The Lifestyle Channel Australia
Co-hosts “The Elephant in the Room” property podcast
Author of “Auction Ready: how to buy property at auction even though you’re scared s#!tless!”
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.
It does not consider your objectives, financial situation or needs.
You should consider whether this information is suitable for you and your personal circumstances before acting on it.
Hi and welcome to the home, run your guide to buying your first home in Australia on the show, I’ll walk you through the home buying process from every angle.
We cover the steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.
I’m your host, Michael Nasasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.
Welcome to part two of our chat with Veronica Morgan about all things auctions in case you missed our last episode.
Veronica is a residential property expert and experienced buyers agent, as well as the co-founder of the home buyer Academy, a course built to provide first home buyers with affordable access to expert advice in this episode Veronica explains what it means to bid like a winner.
She’ll breakdown what bender bids are and how they work as well as share her top tips for keeping your cool in a bidding war.
Finally, Veronica shares her expert insights into how to read auctioneers to help give you an edge on auction day.
Let’s jump in.
So the big day has arrived, we get, you know, we’re there early, we’ve registered ready to bid.
One thing you talk about in your book is bidding like a winner.
What does this mean?
You have to basically make people think that you are going to not stop mind you when I say that sometimes you’ve actually got to play around with that and make it look like you are gonna stop.
But that’s something I can do because I’ve got lots of tools in my tool belt, right?
For somebody who isn’t used to bidding at auction.
I say one of the auctioneers that I interviewed once on the elephant in the room podcast said that he tells people to run to the cliff.
So what that means is that the people that give away when they’ve actually hit their last bid or they’re close to their last bid, they’re not running to the cliff, they’re balking before they get to the cliff.
This is a hard thing to do bidding like a winner means that you are not giving away your weakness to other bidders.
And even if you’re gonna look nervous.
You’re doing it for a reason.
When I look nervous at an auction, I’m doing it for a reason.
I’m not doing it because I’m actually nervous.
I’m playing a role.
These aren’t things that people without all the experience that I’ve got are going to be able to master.
So all I can say is that bidding like a winner means you are not giving away clues to the other bidders
Is everything to do with the speed of the bid.
So if someone bids and are you provided us within your budget, are you going back instantly or is that sort of part of that type of scenario or is it just about playing it and just being confident at that moment?
Whatever that kind of looks like once again,
yes, I play around with speed.
I play around with numbers.
I play around with, I go up and then I go down, I use odd numbers.
I don’t do stupid things by going down to the cents or even down to anything under the round numbers of thousands really.
But some people go down to $16.
I wouldn’t be doing that because auctioneers just get annoyed with you, but I might do a 13,000 bid, then a $5000 bid, then a $20,000 bid, then a $7000 bid.
And then nobody really knows whether I’ve got more money or less money.
They don’t know where I’m whereas everybody else bids, I’ll bid fifties and I’ll be twenties, then I’ll be tens and it’ll be fives and it’ll be ones and it’s like, so it’s like everybody follows this rule.
You don’t have to follow the rule.
If the auction, he says, you know, I’m not accepting your bid.
You don’t have to increase it.
You can step back and wait.
So, bidding like a winner means that you are in control of what you do.
You’re not letting the auctioneer and the other buyers dictate to you what you should do.
And sometimes it means not over paying as well.
It means backing out off and just letting somebody else pay more than you’re prepared to pay.
And I’ve had people come up to me and say, I don’t know how you did it, but you got me to stop before my limit once again.
I mean, that’s an example of how I add value if I’m bidding for a client, right?
Because I’m looking at people and I’m thinking I read them because I do this all the time, right?
So it is a hell of a lot easier for me.
But the thing is in that instance, that was one of those things where they just thought they can’t read me, they couldn’t read me.
So they gave up what was happening.
So let’s go through a few different scenarios and break down what they mean and how to deal with them.
You’ve already mentioned this once.
But the way to start off with is vendor bids.
What are vendor bids?
So once again, every state and territory has this different legislation here in New South Wales, a vendor can only have one bid in other states.
They can have more, right?
What that means is that, that’s a bid that the auctioneer puts out there from the vendor.
So it’s a tool, you know what I mean?
All they’re trying to do usually is set a level.
So if nobody opens the bidding, so if they’ve got people in the room and nobody opens the bidding that they might say, ok, we’re gonna open with the vendor bid at 900,000 for argument’s sake.
And that is sending a message to the audience that don’t come up to me with any bids that are less than that.
And it’s that this inference is the next bid might win, it might buy it, right.
And so it’s the idea is to try to encourage buyers to bid, but sometimes you’ll get vendors that instruct the owner that to make a really high vendor bid.
And I was at one recently where the agent did tell me in advance what the bid was going to be.
And I said I wouldn’t bid at that high for you because our clients don’t have more than that.
Like we won’t be bidding and they did open it at that high level and nobody bid So there were three people registered nobody bid.
So I know how to interpret that.
So I go back to my client, I say that owner is out of control on price.
They’re also trying to control things.
So they told the agent what to do.
And so it’s going to take a long time before they’re ready to meet the market.
So we had to do, we ended up buying it, but it took a number of weeks.
So when there is a vendor bid that’s been put down by the agent through the vendor, how do you handle this at an auction?
Is it any different to any other kind of bid or do you just treat it as if it was another bid?
No, it is different and it’s different because you’re then competing with the vendor.
You know what I mean?
If somebody else puts a real bid, you’re competing with them and they are a real buyer, you’re assuming, are we going to talk about dummy Bidder?
It’s not so prevalent.
No, they don’t.
No, not very often.
I do see them out and about every now and then.
They are not a common current.
Certainly not in New South Wales.
We had new legislation that came in place in September 2003.
So it’s been around nearly 20 years now, this legislation and it really had a very positive effect on stamping out probably 99% of dummy bidding.
So we can be fairly confident.
We’re not dealing with dummy bidders, but I still have seen them on the odd occasion.
So when somebody else is bidding, you’re bidding against a real person.
Whereas the vendor bid, well, a the vendor in New South Wales anyway, can’t give another bid.
So it’s not like you’re continuing to bid.
And also sometimes the vendor bid is too high and it’s like I’m not bidding more than that because it’s not worth it.
There’s a number of things, I’ve actually had vendor bids retracted on the day.
And I guess talking about these sorts of things is giving, I guess your listeners a bit of a heads up that this is a complicated business.
People just think, oh, I’m going to rock up to auction and I’m just going to bid and I’m going to buy it or I’m going to miss out.
They don’t realize all this other stuff goes on.
And what does it mean?
The pitch wherever that vendor bid is pitched, that gives me a message that tells me it’s code for me.
I go right now, I know what the arrangement between the owner and the agent is.
For instance, there’s a lot of code.
So sometimes if it’s a certain level, I think, oh, they’ve got nobody else.
They’re not confident with those other people that have registered.
You know what I mean?
So there’s a lot of intel I can gain from it because of my experience, but for the listeners just be aware that it just means that they’re trying to set a limit or put a bar there.
When people think of auctions, they often think of the classic bidding war, which obviously it is because it does happen.
And let’s say you get caught up in a bidding war and this is perhaps where emotion might start to play if it’s say you and somebody else and you can generally at an auction see them.
I mean, I guess it’s part of that street theater that we’ve spoken about.
If you find yourself in that moment, what kind of strategies can someone adopt that can assist in that moment?
So that the bids aren’t always flying back and forth or is there anything to do in that particular moment?
Oh, it totally is.
First of all, these are what I call often the testosterone bitter.
They’re fueled by ego and those hormones that men have actually women have testosterone too.
So, you know, so it’s like driven by testosterone.
Sometimes that person is just gonna fight to the death and they’re gonna win and it’s just bad luck.
So sometimes you all you’re doing is making them pay more.
And sometimes you have to just accept that.
But you don’t want to be left carrying the can, if you engage with a game with someone like that, it’s risky.
So, one of the things that I often see people do and I’ve even seen buyers agents do this and it does my head in, they get down to the $1000 bids and they just trade off $1000 bids and they do them rapidly, rapid fire trying to scare each other off.
You know that saying about doing the same thing over and over again and expecting a different outcome is just insanity.
I see that play out at option.
so times it’s like, it’s insanity.
You’ve been doing it $50,000 now hasn’t changed.
You’ve each had $25,000 you’ve each had 25 bids.
And I’ve seen those sorts of bids go in, in worst case scenarios for well over $100,000 price pushed up in thousands by two people just basically nose to nose.
And I’m like, something’s got to disrupt this flow.
It’s almost like they’re mesmerizing in this rhythm.
The auctioneer loves it.
This is what the auctioneer been trying to do the whole time.
They get there and go.
You know, this is where I show how clever I am now.
I like to disrupt it by maybe doing a bigger bid when you’re down to 1000.
This common logic says, oh, I don’t want to bid more than 1000 cos I only bid 1000.
And it’s like, well, if you’re gonna go up 100,000, what about if I chuck a 15 in and then they might go, oh, I give up, you know, that sort of breaks the spell if you like, it doesn’t always work, but it’s worth trying because it’s more likely to work than just pitching 1,000,000, 1,000,000.
So that’s one thing, the other thing too is that sometimes this can happen and it’s not even technically on the market.
And when I say on the market that just means it hasn’t gone over reserve.
And so sometimes when you sort of pitching gets someone you think, and I look at the agent and I look at the Agent and I think I’m not really sure we’re even selling at this point.
And so sometimes I’ll just stop and see what happens.
Now, if they’re serious about selling it, they’ll make it very, very clear it’s going to sell and then I might jump in with a larger offer because it might also, they get in that idea, that’s a dangerous thing to do again.
Because of psychology, sometimes people, when they think they’ve had it, then they actually have more of a sense of entitlement about it.
You know, they’ve had that feeling that I’ve won.
And so, you know, that’s a bit more addictive.
But so there’s lots of things that can go on during an auction.
But I just think that sometimes when you’ve got somebody that’s particularly aggressive and particularly hell-bent on buying a property, sometimes you just can’t win against them.
And if you do it’s going to cost you a lot of money.
So you just, it really sucks.
But sometimes you got to back out.
Yeah, you mentioned the term there on the market and a bit of brief explanation.
But how do you approach that?
And I guess how does that work in an auction?
And what’s the relevance of it?
A lot of buyers seem to think that the auctioneer is going to announce it’s on the market, right?
And so that’s code for, you know, it’s above reserve and we’re going to sell.
But a lot of auctioneers don’t want to use those terms.
They want to have smoke and mirrors, you know, they want to make it look like it’s going to sell even before it’s going to sell before it hits the reserve because they want people bidding the smart asses that want to hang back and wait till it’s on the market before they bid.
They yell out at the auctioneer, they’ll heck with them.
And they’ll say, is it on the market?
When’s it on the market?
Tell them it’s on the market.
And the auctioneer will say, oh, mate, it’s been on the market for four weeks.
You know, come on.
If you don’t bid, you’re not gonna buy this thing, right?
This sort of heckling goes on.
But the reality is that whilst they won’t, and they might even say, don’t wait for me to call it on the market because I’m not gonna do that if you want to buy this property, pin your ears back and bid, you know, don’t muck around with me.
Now, they’ll say that because they want people bidding, right?
It’s not gonna get on the market if people don’t bid.
But at the same time when it really is on the market, they will make it absolutely abundantly clear that this property is above reserve, it will sell.
We have confirmed instructions from our vendors.
I mean, it could practically be an auctioneer.
How many vendors have confirmed their instructions?
Ladies and gentlemen, we know everybody else.
We are here, we are selling.
They will say things like that and it’s different to earlier on where they go right.
Calling one calling to, you know, it’s different.
There’s a difference in tone.
Now, I can pick that up.
The average buyer may not, but I do think they do make it abundantly clear before they sell.
And what the average buyer needs to understand is that don’t be clever here, don’t wait till the very last second because I’ve watched people miss out because the hammer has fallen.
So the auctioneer has smack their hand.
You know, the contract went into their hand, and then the person bids and it’s too late.
Once that hammer has fallen, no bids will be accepted.
I’ve seen people miss out because of that.
Yeah, I guess so.
The point is don’t really take too much notice of it.
Just bid to your strategy and your plan.
And I guess if it’s on the market, it is and if it’s not the world, then you can, I guess, deal with it at that particular point in time.
So if you wanted an auction, obviously, it’s pretty clear you purchased a property, you’re gonna pay a deposit.
And obviously, the sale will proceed accordingly with settlement and things like that.
But what happens in the event, say the property doesn’t go on the market or is not on the market or does not sell via the option?
What happens next?
So it will pass in and then what’s called the first right of refusal or negotiation.
So there’s a courtesy that is offered to the highest bidder, which is usually as it runs, you know, people think, oh, it’s my right.
It’s not really, it’s a courtesy, not a right.
And it’s usually that look, we’ll tell you the reserve price, you give us a higher offer and we’ll see if we can go back to the vendor.
You know, that’s normally the way it works.
And, you know, you can dig your heels in.
You can say, no, I’ve already, particularly if it’s been competitive.
You know, if it’s been competitive and the reserve is really high, you know, you can dig your heels in and say, look, I really want to buy this property, but I’ve already beaten off five other bidders.
Like, you know, I’m not going to increase more offer now.
But if it wasn’t competitive for some reasons and you think, well, look, it has stalled before.
It’s still, it would be a bargain to buy it at that price.
I probably could put a little bit more on the table and this is where all your pricing research and everything beforehand is so important.
So, you know, at what times to do that then you negotiate a deal.
But just being aware that once a property is passed in, that agent can still go to other buyers and it won’t be transparent anymore.
So sometimes what they will do is come up to you before they pass it in.
So the auction is still live and they’ll say, look, we’re about to pass it in.
But if you increase your bid to X, you know, the vendor will sell for argument’s sake.
I would never increase my bid under those circumstances unless I knew the vendor was going to sell at that price because there’s no, otherwise all you’re doing is increasing your bid.
Yeah, you’re not getting the deal done.
That’s a really good point there.
But it happens all the time and agents are better at this than most buyers.
So they get that increase.
Agents do it week in and week out.
And buyers generally, if they’re doing it themselves not doing it week in and week out.
So they’re already at sort of a bit of a disadvantage when it comes to that whole sort of game side of things.
What would be your number one tip for first-home buyers who are about to bid at auction for the first time?
Go to other auctions and observe the amount of people that go to their first auction and that’s what they’re bidding at it.
Just, it’s crazy.
You really need to go and just be aware of what you’re in for, go to as many as you can.
And the last thing I want to talk about is the auctioneer.
We’ve spoken a lot about our sort of our strategies and throughout the conversation, you referenced that you don’t want to piss them off, I think by doing their $1000 increase what’s the relevance of the auctioneer?
And are there ways are there things that you can do that can better your chances at an auction in how you engage with the auctioneer?
I mean, the auctioneer is a master, and mind you, there’s been some, there’s some bad ones out there.
Some ones that are pretty rotten.
I mean, I’ve seen in action but most of them practice, they rehearse, this is a performance and they rehearse it.
So your ability to influence the auction is very slim.
Obviously, I can and most of them know me and I rock up and they’re like, we’ll have a bit of banter and we’ll laugh and the rest of it, and, and I, and we may even engage a bit of Argy Bargy during the auction.
So it’s, they’re like, all right, she knows what she’s doing.
I, I like they know what they’re doing and, and we can do that and I’m trying to obviously scare off other buyers when I’m doing that.
But most individual buyers are just unmatched when it comes to the auctioneer.
I, all I would say is that you don’t have to be pressured into bidding a certain amount if they’re asking for a $20,000 bid too.
And you think you know what?
I want to show that I’m a strong buyer here.
I want to scare some other buyers out.
There’s nothing wrong with going in with a $30,000 bid.
You can bid more than what they asked for.
It’s sending a message to other buyers if you bid less and they don’t accept it.
You can hang back and wait and it might be that the buyers are prepared to compete and you get run over.
But it also might be that nobody else does anything and then the auctioneer will come back to you.
I think a courtesy to the auctioneer is important rather than trying to be a smart ass.
The $1000 bids won’t annoy and the auctioneer so much as a $615 bid that will drive nuts and try to be a Smartie and yelling.
Is it on the market all the time?
That will annoy them a bit and trying to heckle them will annoy them because they’re like, oh, for god’s sake, go away.
You’re not even a match for me.
I can run you over.
You know, and I know what you’re trying to do and you’re really transparent.
You know, they get a bit impatient with that sort of thing, but I just think being able to see them and watching the way that they work buyers and watching the way they work you as well.
And just being aware as I said, they’re professional and they practice this stuff.
So it’s not random.
None of it.
Well, thank you so much for joining me on today’s show.
There have been so many great sort of tips and insights when it comes to auctions.
You’ve got a book called Auction Ready we’ve mentioned before and it goes into much more detail and everything we’ve spoken about today.
I actually really recommend it.
I’ve read it.
I’ve got a copy, it’s available now and you’ve been extremely generous and you’re gonna to offer a special deal for our listeners of the home run.
So, can you share with the folks listening?
What that offer is?
I sure can.
So I will give you a discount code which you can use as a home run listener and I’ll give you 30% off the book plus free postage.
So it comes down to roughly about 20 bucks instead of 30 plus postage.
And the code is homerun30 but you can put that in the show notes, I guess.
I absolutely, the website is www.getauctionready.com.au and the code is homerun30.
And that’s as Veronica has mentioned to get a 30% discount on the book plus free postage, which is fantastic and a great offer.
And definitely, one I recommend that our listeners take up the details will be in the show notes.
If anyone is listening and interested, just jump onto the show notes and you’ll see that as well as links to Veronica’s other podcast that she’s got, which she’s mentioned
your first home buyer guide, which is under the banner of Home Bar Academy, also the elephant in the room.
If you really are interested in auctions, there’s in the elephant in the room.
I mean, God, you go back.
I think it’s episode two or three or one, maybe actually episode one, we interviewed a behavioral scientist about the way our emotions control us during auctions.
So that was our first-ever episode.
We now only 300 episodes, right?
And I think episode two from memory, we interviewed auctioneer Damien Cooley and he just lifted the lid on basically from the auctioneer’s point of view.
I did not expect him to be so open and so generous in terms of explaining everything.
So if anyone’s really interested in auctions, they should go and listen to those two.
Number one and two, the elephant in the room.
Well, and if anyone else is listening, that want to get in touch with you, what’s the best way that they can do that?
Everything that I do you can sort of find out about on
So that can point you whether you want a buyers agent, whether you want to be a buyers agent, even because I’ve got a mentoring program there, first home buyers and whatever else on my friend.
Everything is cool.
Well, thank you again for your time.
I really appreciate it and all the tips that you’ve given us to our listeners today.
Thank you so much.
Thanks so much for inviting me, Michael.
You’ve been listening to the Home Run your guide for buying your first home in Australia.
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