Many buyers turn up to an auction with little planning having been done, other than “I think I will bid up to …” or plan B “I will see what others do”.

If you want to spend all your money in this market that, as a general rule, has shifted downwards between 5 and 20% in the past few months (inner Melbourne higher-end properties), then this planning – or lack of it – will achieve that (spending all your money).

2007 was to some extent easy – you turned up, put your hand up and, at the end of the auction, you had either bought the property or you hadn’t. Much of our work as buyer agents was buying before auctions, stringing together bidding strategies, assessing value or negotiating off-market properties.

In 2008, the rules have changed for buyers. In 2008, if you turn up and put your hand up, quite often you are the only person to do so. Look at the results below of the million-plus dollar properties passed in at auctions; more than half had the auctioneer issuing vendor bids at the pass-in price.

So what happens next after you have put your hand up and it’s passed into you?

Usually, you are fawned over by a number of surprised agents (who are surprised because they thought there were going to be five bidders but, for some reason, nobody else showed up). You are taken inside and immediately told just how lucky you are and the reserve is only “x” dollars above the quoted range and this is your lucky day.

Can we rewind a bit before we discuss what are your options from here…………………Roll back

……………………Once you have found your dream home and it is going to auction on this (or a later weekend), there are a few things you should do before auction day.

1. Get an architect or builder to assess the home’s current condition. A pest inspection in many cases is also money well spent.

2. Documentation needs to be checked by a solicitor – not a conveyancer, but a solicitor who can give you a legal opinion on its validity.

3. Get some professional help – and we don’t mean the help that involves somebody giving you medication. We mean a professional buyer advocate, experienced in the type and price of property you are looking at. A buyer advocate experienced in the ways of the other side (granted good selling agents also know a thing or two about managing buyer advocates – so make sure it’s an experienced advocate at the price levels and property types you are looking at).

Of course we are going to say get a buyer advocate – but we can show you numerous examples where we have had a lot of money left in our pocket (or should I say your money stayed in your pocket) when acting on behalf of clients who freely admit they would have planted it down on the table if asked. This is not a slight on selling agents – to the contrary, this only confirms why 99 per cent of all sellers hire selling agents because they do work, they do make a difference and, in this market, good selling agents make a difference more than ever. For some reason, many buyers are embarrassed or feel it’s an assault on their manhood or feel they can, on their first or second go at auctions, match it with the best in the business (high-end selling agents) and therefore they don’t hire a professional buyer advocate.

Many people (buyers) just simply do not know how good a Jenny Dwyer or Barb Gregory of bayside Hocking Stuart are at making you feel all warm and fuzzy as they work you up and up the price spiral. David Hart and James Paynter of Buxton have stronger styles, but are no less effective when dealing on a one-buyer (maybe you) property, but making that buyer feel he or she is one of four.

Many buyers don’t understand how good Andrew McCann or Kaine Lanyon of Bennison Mackinnon are at building you up to a pre-auction negotiation when, in fact, you are the only potential bidder. Michael Gibson and Michael Armstrong of Kay and Burton are quite polished at giving you the constant impression that they are there to help. But, unless it’s at such and such a level (price wise), while they would love you to buy this truly magnificent property, they cannot recommend a sale by their vendor. James and Hamish Tostevin of Marshall White are legendary with their skills at engaging you within 30 seconds, making you feel you have their undivided attention, that you are special and they will help you pay this incredible price you need to pay now if you want to buy your dream home.

Contrast Alastair Craig and Scott Paterson of Jellis Craig who have styles that are very smooth, very professional and sometimes a bit dismissive – but this is a tactic to push you into new price levels and they are doing this on behalf of their client, the vendor, not you the buyer.

Any of these agents (and many more) are simply very good at their job and, in this market, when they are focused, they are formidable opponents and significant obstacles if you want to buy the property at what you consider to be a good price.

Two final points on buyer advocates. It is better if you speak to us before you open your mouth on price to the selling agent. Our fees? Simple: no purchase, no charge (so you’re on par with the other buyer that didn’t buy) or 1 per cent plus GST if you are successful. That’s one bid, a fraction of the first agent bluff and two bits of not much if you have secured the home you really want.

4. Get a FIRM idea on different value ranges – in today’s market, last year’s data is a guide but not a bible. The market has shifted and next week it may shift again – we are in volatile times, so you need different price guides for different situations. ON THE SAME PROPERTY.

5. Get a plan – flowchart scenarios, prepare scripts on what to say when under pressure.

6. Practise your breathing, your scripts. We know some clients laugh when they read this bit. It’s true. If you cannot go to Harvey Norman today and HAGGLE $150 off the asking price of a computer, or you cannot get up in front of 20 office colleagues and give an off-the-cuff talk on why your dream home is in fact not your dream home, then are you sure you are the right man (or woman) for the job this weekend against experienced buyers and quality selling agents? Alternatively, have you the skills to take advantage of poor selling agent preparation?

OK, so now to auction day

1. Does the auction feel alive or not?

2. Should I open the bidding or not? The advantage to opening the bidding is you can make it lower than a vendor bid and, if you are smart, that may stop the vendor bidding. The disadvantage is it gives your buying opponents, Nervous Nellie or Nervous Neil, a confidence boost that somebody else likes this and then they start bidding.
3. You’ve bid $1.83 million. The vendor bid is $2.1 million. OH MY GOD. What do I do now???? …………………………………………..

………………………. Roll forward: it’s passed into you and you are sitting in the lounge room of your dreams and your final bid was $1.125 million and the agent has said you can buy it for $1.35 million. What do you do?

Thoughts that run through our mind:

1. The quote
2. The agent and his or her experience (What have been their recent successes? Or not successes?)
3. Was there any other bidding?
4. Has the vendor bought (research beforehand)

Some of the tactics and techniques an agent may use on you – do you know what to do?

1. The squeeze
2. Silence
3. Walk away
4. Double tag – one responding and one listening
5. Higher authority
6. You instead of us
7. Multiple offers
8. Over the top – new player
9. The trial agreement – if I can get my guy to
10. The deadline
11. Build the pace
12. Slow the pace
13. The alternative (competition)
14. The no response
15. Show me the money
16. The fait accompli
17. Grinding
18. Timing
19. Bridge building
20. Laugh and pause
21. The withdrawal
22. The 1,2,3 drop
23. The dribble, dribble, solid amount – last gasp

If we haven’t at least made you think about your auction this weekend, then apologies, but if we have, then let’s meet and have a chat – no obligation and you assess if we can add some value.

After all, GREAT NEGOTIATING is not about missing out – anybody can do that. GREAT NEGOTIATING is not about paying over the odds by a long way and spending all your money and then some – anybody can do that. GREAT NEGOTIATING is about getting what you want at a price you are happy with.

Why should a SELLER have all the odds in their favour – the market has shifted direction – HAVE YOU?

30 March 2008

Dear Mal, Peter, Melissa and Adam,

Re ………… Avenue Balwyn,

We would like to take this opportunity to thank you very much for securing our future home.

When one of our colleagues pulled out at the last moment in assisting us for the purchase of ……… Ave Balwyn, we thought we would need some help in making one of the most important decisions (financially) in our lifetime.

We were both extremely impressed given the short time frame you and Peter had to work with ie less than 48 hours before auction.

Your professionalism in putting together a substantial report on the property and the follow-up strategy at auction and post-auction negotiations, we believe gave us the edge in securing the property.

We were glad that you were bidding for us at that auction, as you took control of the proceedings immediately and certainly made it clear to other bidders that they had a real fight on their hands if they were to be successful.

We cannot talk highly enough of your overall approach and in particular your post-auction skills in negotiating a great price for us. We firmly believe that you have added value in the process of purchasing our home and would not hesitate to recommend you to any friends or family.

Well done to your team.

Yours sincerely

Ezio and Sonia