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We'll show you step by step exactly why real estate agents prefer to sell their properties at auction and what tactics you need to know to avoid the BIG mistakes, so stay tuned.

00:00 Auction Bidding Strategy [6 Auction Tips for Buyers in 2024]
00:59 1. Time pressure
02:25 Bonus secrets real estate agents use at auctions
02:37 2. Only unconditional offers
03:56 3. Sunk cost theory
04:51 4. Beware of greed
06:51 5. How the auction sales process works for the broker
09:13 6. Buyer beware

1 Time pressure
Make no mistake: Auctions are held to achieve record prices. They are for the benefit of the seller, not you, the buyer. —

Their favorite tool is time. Although it is intangible, it is used to create the impression that if you don't act now, you will miss something. Time is the guardian of all good decisions. If you have enough of it, you will never make a wrong move. Without it, however, it is like making a decision by flipping a coin.

2 Only unconditional offers
Please note that all auction offers are subject to no conditions, no building inspections, no pest inspections, no financing checks, no due diligence. You are buying the property without having the ability to do so.

Therefore, to bid confidently, you need to invest in advance, even if you don't know whether you will be the successful bidder.

Think about it: If you wanted to sell a property that had a few “bells and whistles,” which selling method would you choose?

3 Sunk-Cost Theory
This is because ownership is unconditional and you have to pay for diligent bidding to get in on the action, creating a sunk cost. Sunk cost theory essentially states that by putting in a stake in the thing, whether that be money or even time, there is a greater tendency to continue even if the path turns out to be destructive.

4 Greed
At one stage of my career as a mortgage broker, I worked one or two days a week in a real estate office. Because of this, I regularly attended the team training sessions. In this particular office, they initially focused on auctions. In these meetings, the phrase "feed the greed" was often used. The trainer kept repeating this, saying that you have to feed the greed.

Essentially, the agents are drawn to you, the buyer, and your inclinations. If they do it well, they will make you believe that you are getting the property for free. Think of it like mental judo, where the agents try to use your own energy against yourself. They do this by making you believe that the property will sell no matter what and that no matter what your budget is, you have a great chance.

As the great Jim Rohn once said, “We must STAND WATCHFUL at the door of our own minds.” To avoid feeding greed, here are the questions you should ask:

– what the agent tells me is too good to be true
– If I were the seller, how much would I ask for this property?
– How do I know that what I am being told is true? Which situation is more likely?

5 How the auction sales process works for the broker
okay, now we have discussed the four reasons why agents choose to sell via auction, let's understand the three stages of the auction process.

The first phase is called the “pre-auction” and in this phase the agents try to accomplish two things.

First, all offers for the property must be presented. The real estate agent's goal is to inform the seller of what the market is willing to pay for the property. In this process, buyers' expectations can often be raised and disappointed. This is because the real estate agent is looking for all offers at this stage, no matter how low they are, as they want to make the seller understand that their property is worth less than they expected. It is very common for sellers to have unrealistic expectations about the value of their home.

6 – Buyer beware
If you are considering participating in an auction, it is important to know that they are not designed to your advantage in any way. They are run solely with the goal of obtaining the highest and most competitive bid, and this is done through competition and scarcity.

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