The point of starting with a high opening bid is to mess with the opposing bidders (if there are any) and to get the property on the market.
Whatever your tactics are in bidding, the property is not going to be sold until the auctioneer utters the immortal phrase, “the property is now on the market.”
They do, however, try to entice and force the bidding by using familiar phrasessuch as “we are selling”, “make no mistake we are here to sell the home” and “your time is now.”
I used these dummy phrases numerous times, to be occasionally called to account by someone shouting, “is it on the market?” The answer was and is “it has been on the market for the last four weeks, is that a bid?”
I cannot guarantee every auctioneer will utter the immortal phrase 100% of the time, however 99.9% is a pretty fair bet.
Go to some auctions and really listen.
All the agent’s efforts will be to get the property on the market because once it is, they know a sale is certain. The halftime break is usually employed to persuade the seller to put the property on the market.
Unless you are the highest bidder from that point on, you will not be the buyer.
During the auction, the auctioneer may employ a ‘vendors bid’ against you (a bid by the auctioneer on behalf of the sellers to raise the price). DO NOT bid against the seller. Also look out for ‘dummy bidders.’ These are people among the auction crowd with instructions to pose as a buyer and bid up to a pre-determined level.
“Sometimes the dummy bidders are the only bidders.”
– Terry Ryder, Confessions of a Real Estate Agent
Also if the immortal phrase, “the property is now on the market,” is not spoken, with near certainty the property will be passed in. If this happens, then all initial discussions following the auction will take place with the person who was the last to bid. It’s important for you to be this bidder. Auction rules state the agent will offer the first right of refusal of the vendors’ reserved price to the person whose bid it passed in on.
We’re more than happy to answer any questions via Facebook, Twitter or this blog.
