A guide to bidding at an auction over the phone
Bidding over the phone is an excellent option for people who can’t physically attend a property auction.
Bidding over the phone can be a practical alternative for people who can’t physically attend a property auction. Here’s a quick guide on how to do it and auction strategies to consider when auction day comes:
How to bid over the phone
Buying a property at auction over the phone typically involves nominating someone to stand in for you on auction day. If you don’t have someone to nominate, you can consider an agent instead.
If you’re the successful bidder, indicating how you will pay for the deposit is also an important part of the process. In many cases, auctioneers may ask to be notified of the authorised representative who may bid and sign the contract on your behalf. The requirements will vary by jurisdiction.
Apart from the telephone, Zoom, Facetime and other apps can also be used to give you an idea of what’s going on during a property auction.
The upside of bidding over the phone
Bidding over the phone can offer convenience and flexibility. Common reasons why buyers may want to bid on the phone or through a representative instead of attending the auction include:
- Travel restrictions
- Feeling unwell or needing to take care of another person
- Personal emergencies
- Not being a resident in the area
- Working with a buyer's agent
Attending auctions over the phone can also help those who want a calmer atmosphere. Auctions can be loud and intimidating, especially for those who don’t have a lot of experience. By bidding over the phone, buyers may more comfortably navigate the auction as it provides anonymity. Phone bidding offers buyers who are shy or anxious to call out during an auction without needing to be there physically.
Phone bidding also separates the buyer from the typically fast-paced environment of an auction. It can become easy for buyers to get carried away in an auction where everyone is putting their hands up and making higher and higher bids. Bidding over the phone can mean less risk of overspending and reduced emotional stress.
The risks of bidding over the phone
There are also risks involved when you bid over the phone at an auction. The person you nominated might not have any bidding experience, or they might have poor post-bidding negotiation skills, so there is a chance that you will not get the property at the lowest price or not win at all.
It may also be more difficult to feel what the competition for the property is like. You cannot read your competitors' body language or get the dynamics of the competition in the auction room.
That’s why it’s common for people to nominate someone they know and trust. It could either be a friend who lives in the area or a real estate agent who will act on your behalf. Advising them about your strategies and your bidding limit before the auction day will help.
Tips for bidding over the phone
Many buyers find it helpful to arrange the usual pre-auction preparations, such as inspecting the property and arranging their finances, including getting their loan pre-approved. In addition to the usual preparations, here are some useful tips to keep in mind:
Choose your representative wisely
A suitable proxy is likely someone you trust who can confidently bid on your behalf and is familiar with the auction process. Finding someone who can follow your instructions and stay within your limits is key.
Choosing a friend or family member can put phone bidders at ease knowing their proxy is a trusted individual. Many phone bidders choose a buyer’s agent for the expertise they bring and for additional guidance when it comes to buying a property in an auction.
Think of a strategy
You may find it beneficial to discuss a strategy which includes the maximum amount you’re willing to bid, bidding increments, timing of the bids, and other considerations. Buyers may want to brief their proxy before the auction takes place so they understand your plan and budget limit. Being on the same page with your auction proxy means fewer opportunities for miscommunication and a smoother auction experience.
Secure financing
It can be helpful to organise your financing well before the auction. Without proper financing, the bid could fall through, which may result in the buyers paying hefty fines.
Some buyers will consider applying for a home loan pre-approval to gain a better understanding of their potential borrowing capacity. With a pre-approved home loan, buyers can bid with more confidence knowing they have the potential financing to back it up. It can also guide them as it provides a general indication of how much they could potentially borrow.
To learn more about auction-ready pre-approved home loans, our friendly lending specialists can help. Get in touch by calling 13 10 90 or arrange a call with us!
Disclaimer: The information provided in this article is general in nature and does not constitute financial or legal advice. Please seek independent professional advice tailored to your personal circumstances before making any financial decisions.
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About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
