Setting bidding limits

GETTING a little carried away on an eBay auction may not put you in too much trouble, but getting a little carried away at a property auction can place you under significant financial stress.

There are a number of mistakes when setting bidding limits for an auction, but luckily if you avoid these common pitfalls, you can be assured that your competitive spirit won’t get the better of you (or your wallet).

Avoid stretching yourself too thin
There are many hidden costs of buying a home, forgetting these when setting bidding limits is a common mistake.

Remember to account for the legal costs of buying a home, moving day costs, pest inspections, financing costs and insurance.

Once you have taken everything into account, you may find that your bidding limit is up to $25,000 lower than your initial estimations.

Don’t aim too high
Everybody wants their dream home, and who can blame them? But there is a reason it is called the property ladder.

Make sure you target your research efforts towards properties that are well within your means.

Get to know how an auction works
It is important to know the various techniques auctioneers will use to try to drive an auction forward, or bidders will use to keep the price down, for instance, knowing that some bidders will come into an auction strong at the start in an attempt to scare off less experienced bidders will place you in better stead to take your time.

Do your research
Researching the market you are trying to tap into as well as the larger market in general will help you set realistic bidding limits before auction.

It is important to set your limits based on research and a thorough understanding of the market, not gut feels.

Practice your skills
It might be unwise to start putting your hand up at multi-million dollar auctions if that isn’t your limit, but practicing your bidding can simply mean attending as many auctions you can and imagining where in an auction you would begin bidding and how this would affect both your heart rate and the auction. Never giving your limit away during the auction is key to keeping that price down, be assertive until your very last bid.