Let's talk about Negotiation

"When negotiating a property deal Knowledge is Power!"


Negotiation

Negotiation is an art, not a science. The art of negotiation is not win-at-all-costs. It is about negotiating a contract where the seller can feel like they are winning in the deal. Remember if the seller has taken the trouble to list their property then they are motivated to sell (some more than others).

One of the keys to property negotiation is not becoming emotional about the transaction. It is only when you are able to walk away from a deal that you truly begin to negotiate, otherwise all you are doing is haggling over the list price.

We have a list of 19 questions we ask every agent about each property, which researches the seller’s position and also acts to reduce price expectation. Some examples of these are:

1. How long has the property been on the market?
2. Why are they selling?
3. Who came up with the list price? How was that price reached?

The fatal traps of negotiation

At Morpheus Property we have experienced many different negotiation styles, techniques and situations. We would like to share some of the pitfalls of negotiation.

1. Poor or no planning - This has to be the biggest failing of many negotiators and the major reason for not achieving the best outcome. Take time to develop a plan of attack.

2. Don’t talk too much - One of the overlooked talents in negotiation is the ability to “shut-up”. If you remain calm and listen more, you will be amazed at what you will learn and achieve.

3. Negotiating verbally - A written offer shows you mean business. It will also give the sales agent better ammunition to convince the seller that this is your best offer. Always put a sunset clause on any written offer. Making the offer for a limited time will encourage the need for action.

4. Not following your gut instinct - This doesn’t mean following the first reaction that comes to your mind. However you do need to develop a gut instinct for the situation. Gather as much data and information about a property deal and then let it have time to ferment. Listen to your gut instinct but only after you have told your gut all it needs to know.

5. Take no prisoners approach - Coming in hard and fast will rarely deliver the “best deal”. Take your time and build rapport. Find out as much as you can about the seller and the property. Steady as she goes will win the day!

6. Don’t aim too LOW - Be careful what you ask for, you might just get it. Fortune favours the brave and much of negotiation is having the guts to ask for something.

Yours in property
The Morpheus Guy's

Slow start to Auction results in 2010

Figures from RP Data showing only a handful of auction results for the week ending 17th January 2010.

Buyer's Agents at Morpheus Property have already represented clients at auctions and they were very poorly attended. When a property gets a poor response at auction, it can present a great buying opportunity for those seeking below market value (BMV) purchases.

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Price Baiting before auctions - How are they getting around this?

When a property is advertised for auction, real estate agents aren't supposed to give any indication of the price the owners are likely to accept. Advertising with a suggested price bracket or lower limit is referred to as 'price baiting' and this practice is not allowed. For futher reading on this, take a look at the guidelines for auctions published by the REIA.

Now we've establishd what should happen, but how is 'price baiting' still occurring?

Okay, there are the blatently obvious ways. For example, if you work your way through auction listings on the web, it won't take long before you come across an auction listing with a price next to it. I just did a quick search of Brisbane auctions and the 5th listing had a price of $389,000. The other blatently obvious method is where a buyer asks the agent.

However, there are also more subtle ways.

Example:
As you know, a property may be sold by private treaty (standard contract negotiations) or by auction. When an agent starts a marketing campaign, their client may advertise it for sale by private treaty and nominate a price (your typical ad, "House for Sale - $850,000". After a week, the vendor can opt to go to auction instead. As soon as this happens, breadcrumbs are left behind to offer the same effect as price baiting. Mission accomplished!

As always, buyer's beware!

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Vendor Bidding = Last Offer? I don't think so!!

Have you ever talked to a real estate agent about a property that has been passed in at auction? Whenever this happens, I always ask what it was passed in for (the highest bid). Sounds like a reasonable question, doesn't it?

Problem? Not all bids in the bidding process are genuine bids. We'll skip 'dummy bidding', as that's an article on its own. In this instance, I'm referring to 'vendor bids', or bids made on behalf of the person selling the property. These are usually made by the auctioneer on behalf of the vendor so they can bump the price up to its reserve price.

Anyway, I was representing a client a couple of months ago for a property in North Lakes. As my client couldn't enter into a cash offer, I couldn't bid on his behalf. That didn't bother me, as there was no competition on the day. Either the marketing wasn't fantastic, or there were no cash buyers, as no-one placed an opening bid on the property.

Instead of walking away from the auction with no activity, the auctioneer made a couple of snappy vendor bids. I estimated the property's value to be around $510,000 - 530,000. Sure enough, the last vendor's bid went to $510,000, then it was passed in without a peep from any buyers. I spoke to the real estate agent the next day and asked him how the auction went. He told me that there was plenty of bidding activity and it was passed in for $510,000.

- What would you make of that tale if you weren't there at the auction?

- How would that statement influence you as a buyer?

Fortunately, we knew what really happened. We were able to advise our client about the lack of activity on the day (or 'what the market thought of the property') and how we could take advantage of this. In the end, we achieved a great result for our client.

Remember, Morpheus Property can help represent you at auctions for a small fee ($880 if successful, $440 if passed in). We don't always recommend bidding (as in the above example) and we happy to help with post-auction negotiations. Give us a call on 1300 911 576 if you're considering buying at auction and we'll make sure you don't get sucked into the shenanigans.

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Auctions - "Vendor Bidding" - REIA Guidelines

In a nutshell, "Vendor Bidding" is where the party selling the property bids during an auction. The idea is that they're to push the price up to the reserve price where it can be sold.

There are a couple of rules associated with this practice, such as the need for all bids to be clear and transparent (announced prior to auction commencing and before each vendor bid) and no bids once the bidding reaches the reserve price. Have a quick read of the guidelines from the REIA, which explains in more detail.

Why is it that buyers sometimes bolt in a one-horse race? Why would you bid at an auction when you are effectively the only bidder? Mostly, I put it down to confusion on the part of the buyer.

Where does the confusion come from?

The auctioneer is required to make the vendor's bid clear and unambiguous, HOWEVER, 'clear and unambiguous' is relative to the buyer's experience at auctions. Despite an auctioneer declaring that it's a vendor's bid, an inexperienced buyer can be quite confused and may not distinguish these bids from genuine bids.

When you're bidding at an auction, there is plenty of excitement, adrenaline and Real Estate Agents whispering in your ear, "I bet you only need one more strong bid and you'll buy it", etc. With all this noise and distraction, the words "The vendor is exercising their right to place the next bid at $855,000" probably gets translated into ".... ..... .... .... bid at $855,000", particularly when the auctioneer points to the other side of the crowd to give the illusion there's another potential buyer in the crowd.

My advice:
- Stay alert to the practice of vendor bidding.
- Know the legislation as it applies to your state or territory (there are some minor differences)
- Don't win the one-horse race. If you're the last bidder and the only other person bidding is the vendor, STOP BIDDING!!!

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Auctions - Good or Bad - Let's take a look!

Firstly, a little "Property 101" - If you're about to sell your property, you have too main methods:
1/ Private Treaty (typical contract negotiaion approach)
2/ Auction

If you're selling, you've probably toyed with the idea of going to auction. You'll find some agents recommend against auctions, while others swear by them and push all their properties into an auction.

I think there's a less black-and-white approach to deciding whether you should take your property to auction. We'll briefly look at the pros and cons of auctions, so you can decide what's best for YOU.

Advantages:
- Potential buyers bid against each other to get the best price
- You can set your own conditions - Buyers can't set conditions
- Contract has no cooling off period
- Encourages buyers to act

Disadvantages:
- The reserve price may not be reached
- Advertising costs are high
- Potential buyers only include those capable of bidding (cash buyers)
- Discourages private treaty offers prior to auction (due to no list price and buyers lacking confidence in making a bid)
- It may reveal a lack of interest (particularly if most interest is from buyers needing finance conditions in a contract), which can make post-auction negotiations a little more difficult.

Whether an auction suits you really depends on two key elements:
1/ You
2/ The property

You
- As the seller, you need to be comfortable with the pressure you're likely to experience during the auction (and 'yes', you will feel under pressure on the day). If you think the pressure may force you below your price threshold, perhaps it's not for you.
- An auction takes a few weeks to generate some interest and allow potential buyers to inspect the property (a few times) and be prepared to bid at auction. If you need to sell your property quickly (within days), auctions will definintely not work for you.

Your property
The following are when a property is better suited for auction. The property:
- has development potential
- is in the inner city area
- is unique (making it difficult to establish a market value)
- is a commercial property

In the end, it's up to you to weight these up and decide for yourself. If you would our opinion, feel free to call and talk to us about your property. It won't cost you a cent and we'll happily help you out - 1300 911 576.

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Sustainability Declarations - 1 Jan 2010

A sustainability declaration is a compulsory checklist that must be completed by the seller (vendor) when selling a house, townhouse or unit. It will be required as part of the sale from 1 January 2010.

The checklist will identify the property's environmental and social sustainability features in four key areas:

• energy
• water
• safety
• access.

If you're thinking of selling and need help understanding the implications of this report or who to contact, give us a call at Morpheus Property - 1300 911 576.

If you are buying a property and need to know how to interpret one of these reports and what this means for the property's value in the long term, we'll happily talk you through it.

"Vendor's Bid" v "Dummy Bidding" - What's the difference?

This is a common question we hear at Morpheus Property.

In Queensland, Vendor Bidding is permitted at auction, whereas Dummy Bidding is forbidden. So, what is Vendor and Dummy Bidding and what's the difference?

In short, both Vendor and Dummy Bidding occur when someone places a bid on the vendor's behalf. It is usually made to stimulate activity at auction and achieve a higher price for the person selling the property.

The Property Agents and Motor Dealers (Auctioneering Practice Code of Conduct) Regulation 2001 permits Vendor Bidding when it is properly announced and the bid is not made once the price is over the vendor's reserve price (if there is one).

32A Auction conduct—seller bidder
(1) This section applies in relation to a seller of property offered
for sale by auction.
(2) If the seller bids for the property when it is offered for sale,
the auctioneer must announce to the other bidders that the bid
is made by the seller.
(3) Also, if the seller sets a reserve price for the property under
the Act, section 574A, the auctioneer must not accept a bid
from the seller that is higher than the reserve price set for the
property.

Quite similar to Vendor Bidding, Dummy Bidding is where someone places a vendor's bid, however, it is NOT announced to the bidders at the auction. This is illegal in Queensland.

Does Vendor Bidding work as a strategy? Yes! We've seen many examples where it's worked quite well for the person selling their property. This is usually because the bidders are so adrenaline-charged and nervous, they're not quite sure what's going on. In all the excitement, it's often difficult for the average buyer to hear the 'vendor's bid' amongst the high-speed gibberish of the auctioneer.

The other side-effect is where a property is passed in. Let's say there are no active bidders on auction day, but there has been some interest in the property. If a property's worth $500k, an auctioneer can make a vendor's bid of $480k, have the property pass in, then the agent can promote the property as being passed in at auction for $480k. When a buyer hears this, they are led to believe there is demand for the property and the vendor is unlikely to accept anything less than $480k (because the offer was rejected at auction).

The best defence against these tactics is to know the property's value, research auction laws and practices and attend a few to see what usually happens. Write down the bidding activity and critique their approach. After a while you'll start to see what works and what doesn't.

Alternatively, you could spend $880 and have professional representation at auction. Call 1300 727 586 if you'd like someone to represent you at your next auction.

Good advice - Where are you getting yours from?

This sounds like a simple enough question, yet the responses we hear are often quite frightening.

There are three main examples of how buyers obtain advice. We seek:
a) NO advice
b) some advice, but we choose unreliable sources
c) some advice from reliable professionals

Throughout a property transaction, you will often need some or all of the following professional services:

• Wealth Coach - to help ensure you have clear goals, a good budget, etc.
• Accountant - to ensure tax effective set up
• Solicitor - to maximise your asset protection, as well as ensure you're using legally enforceable and suitable conditions in your contract of sale
• Buyer's Agent - to find the right property at the right price and ensure the transaction runs smoothly
• Building and pest inspectors - to ensure the property is what it appears to be (help eliminate surprises)
• Conveyancing - manage all legal correspondence and searches
• Property Manager - find tenants for your investment property
• Tax Depreciation Specialists - ensures you get the maximum refund for your investment property

NO advice - Example

Buyer A goes to an auction to see what they're all about. A Real Estate Agent greets Buyer A at the entrance to the auction and encourages the buyer to "register to bid" - no harm there....

During the auction, Buyer A gets quite excited by all the noise and hype.  Not knowing the value of the property on the day, Buyer A puts his hand goes up in the air to make a 'silly' offer on a property. He believes it couldn't possibly go that cheap, so again - no harm there.

Unfortunately, Buyer A made an judgement error.  His first bid was the ONLY bid and Buyer A is now the proud (and very nervous) owner of a property he knows very little about.  Prior to the auction, Buyer A could have seen an accountant, solicitor, buyer's agent, building and pest inspector, but chose not to.  The consequences could prove to be devastating.

Advice - Unreliable source
Buyer B enjoys a lovely Sunday BBQ with close friends and family.  Buyer B's uncle (the property mogul of the family who 'knows everything') starts talking about a mate of his at work who uses a hybrid trust to purchase property. The uncle explains how this mate of his had sought professional advice and the trust was the best way to achieve the best asset protection and tax efficiency. As Buyer B is about to buy her first investment property, Buyer B listens intently.

On Monday, Buyer B sends an email to her solicitor with instructions to set up a trust entity - the solicitor obliges.

Buyer B then proceeds to get finance and purchase the property in the trust entity's name.  While the solution for one buyer may be the best for that person, it wasn't the best setup for Buyer B. The buyer only finds out how much she has lost when she walks into her accountant's office to help her with tax reporting obligations.

Advice - Professionals
Buyer C is an Engineer. She knows how to build a bridge and appreciates the benefits of growing her investment portfolio to generate wealth. She also realises her limitations and understands the value of professional advice. As such, she begins with her accountant and lawyer.

Once Buyer C has her structure sorted, she applies for finance pre-approval. In a strong position to buy, she approaches her Buyer's Agent to do the searching and negotiation on her behalf. Buyer C relaxes as the Buyer's Agent ensures the appropriate professionals are engaged throughout the purchasing process.

Buyer C has bought her investment property, which is optimised in terms of:

- asset protection
- tax effective set up
- value for money
- potential growth
- good tenants, who pay on time

If you want a buying experience similar to the last example, we can help you.  Operating in the industry every day, we know the good professionals, who can help deliver these services and make sure you get the most out of your property purchase.

Yours in property! 

STOP THE PRESSES

RBA REDUCES INTEREST RATES

DOWN 0.75% to a Cash Rate of 5.25%

Bad times in property markets are great times to buy property! While most home-buyers and investors have sat on their hands waiting for something to happen, even if they weren't quite sure what it was they were waiting to happen. The housing market in Australia is being driven by sentiment that doesn't match the underlying economic fundamentals of the Australian ecomnomy and the housing market, and is looking more to the property markets of the US.

This has deterred new and old buyers alike, but this stalemate can't last with a distinct lack of suitable housing to meet demand, vacancy rates low, money becoming cheaper and the huge incentives for first home buyers. Housing prices will stabilise and now is a great time to buy at or near the bottom of the market cycle.

With interest rates falling, the population in SE Queensland rising and a lack of housing supply, property is still an excellent investment. The masses tend to buy when prices are high and sell in the tough times when they are low. Smart property investors work counter to the cycle, buying low and selling high are capitalising on others' mistakes.

In order to maximise the rewards from your property purchase, whether it be your own home, a business premise or an investment property, talk to a Morpheus Property Agent and get the expert's advice.

Call on 1300 727 586 or email us at enquiries@morpheusproperty.com.au

Yours in property

Auction Clearance Rates at 37.% for Brisbane last week

Source: RP Data

The auction clearance rate for Brisbane was 37.1% last week. Another symptom of a buyer's market and a significant change from the average clearance rates in 2007.

Morpheus Property has noticed many buyers are put off by auctions. When a property goes to auction, there are obvious disadvantages to the buyer - the inability to include conditions and the potential for competition. However, pre-auction sales have no such restrictions. If you want to avoid an auction, place your offer with enough time to get it off the market prior to the auction date. Although agents list properties as going to auction, most vendors are seriously considering all offers in today's market.

On the other hand, auctions can give buyers the advantage - They reveal the competition and what they can afford. This can be useful where an auction is poorly attended and the property is under some form of duress to sell (foreclosure, vendor has already purchased antoher property, etc). When the auction doesn't draw a crowd, it can reveal what is a reasonable offer for the property after it's passed in at auction.

However, Morpheus Property notices that many buyers don't even consider making offers prior to auction - either because they don't think it's possible, or they're not confident of the property's value.

Migrants and Foreign Investors are also dis-inclined to bid at auction, due to the requirement to lodge FIRB applications. Remember, the Foreign Investment Review Board (FIRB) can fast-track applications for properties at auction, but it is essential to have this approval prior to auction.

If you're unsure or would like advice about your buying strategy, call us on 1300 727 586.

Yours in property!

Auctions

Work out what the property is worth. Research recent sales, set a limit and stick to it!

At Morpehus Property, we:

• perform an appraisal of your property
• consider your upper limit
• document our bidding strategy AND
• we stick to it.

As your agent, we will ensure the tactics used by the auctioneer will rub off and not cause you to get swept away in the frenzy.

Call 1300 727 586.

Yours in property!

Trivia: Origin of the Hammer and Gavel

So, where did the Hammer and Gavel come from?

These days, the hammer and gavel is mostly associated with the words 'Court adjourned' and 'Going, going, gone!'

Daniel Bray of the Sydney Gild -Hall at Sydney University has spent a long time looking into this and he has come up with the following:

"The cult of Thor had gained in popularity through the Viking Age, so that by the tenth century, he was venerated above all other gods in most parts of Scandinavia. Unlike the grim and aristocratic Odinn, Thor was a god of the people, and a friend of landowner and peasant alike.

Thor was patron ofjustice, his oath-ring could seal any contract, the Althing assembly of Iceland was opened on Thor's day (Thursday). Thor was seen as a protector, defending the old order of the heathen landowners and petty nobles from the predations of the land-grabbing, power-hungry and zealously Christian Kings of Norway.

Wearing the sign of the hammer, then, was not just a symbol of one's trust in Thor, it was also an instrument of his protection"

These days, any ol' agent can carry one!

For more information, see "Hammer in the North: Mjollnir in Medieval Scandinavia", by Daniel Bray.

Yours in propoerty.

FIRB - When do I need to apply?

If you're an expat, moving to Australia or an overseas investor, buying real estate may seem as clear as mud!! Unless you're a permanent resident of Australia, your options are limited and there are some hoops to jump through.

If you intend to purchase property in Australia as a 'foreign investor', the Foreign Investment Review Board (FIRB) is the entity responsible for assessing your application.

Q. So, does this apply to me?
A. This question's not as simple as it sounds. There are a variety of relationships and legal entities capable of purchasing property. As such, there are tests to determine whether you are a 'foreign investor'. To confirm whether all this applies to you, follow the Q&A on the FIRB website.

Q. According to the Q&A, I am a 'foreign investor'. Can I still invest in Queensland property?
A. The answer is 'yes', but there are limitations. You need to seek approval from the FIRB and there a variety of methods for doing this, including applications made:

1. as a condition of sale
2. prior to auction (as auctions are unconditional purchases)
3. by the developer

Where a developer submits a D2 Form - "Form for Developers" to the FIRB, the burden shifts from the buyer to the developer and is the only occasion where you can consider your purchase as 'pre-approved' by the FIRB.

Under the D2 Form, developers can make application in relation to 10 or more dwellings for advance approval to sell up to 50 per cent of new residences to foreign interests. If you are interested in buying, developers are required to provide you a copy of their approval letter.

The applications are limited to certain types of property, including units, town houses, etc. It does not apply to developed residential real estate that has been refurbished

Need to know more? This is only a slice of information from the FIRB website. Please contact us if you need further assistance with your purchase - 1300 727 586.

Useful references:
FIRB "Buying a Home" brochure
The FIRB policy statement in relation to Off The Plan approvals.

Yours in property

Auctions can be scary!

The most important difference to note when you buy a property at Auction in Queensland is that there is no cooling off period as there is when you buy property in accordance with the standard REIQ contract of sale.

At the fall of the hammer the highest successful bidder (if the property is on the market) enters into an unconditional cash contract for the purchase of that property. Therefore it is important that a client has finance and any other due diligence completed prior to the Auction.

When a property is sold at Auction the highest bidder at the fall of the hammer will be required to sign a Contract of Sale and pay a deposit on the spot … usually 10% of the purchase price. The contract governing the auction will be made available for review prior to the Auction day and you should obtain a copy and check the terms and conditions of the contract and seek independant legal advice. You should also check the contract for the nominated deposit amount prior to the Auction. Deposits can be paid by Personal or Bank Cheque.

When clients wish us to bid at Auction on their behalf we have a process we go through. We confirm a bidding limit and any other instructions you have in relation to the Auction and ensure that you have considered and allowed for extra costs such as legal, stamp duty, finance fees etc.

We advise the Sellers Agent handling the property that we will be attending the Auction on behalf of a client but do not indicate who that client is. Obviously they will know once we lodge a completed authority on the day of the Auction.

Wherever possible we like to set an uneven limit, rather than stopping on a round number. For example, if we were bidding on a property valued at circa $400,000, rather than stopping at 400,000, try going to 401,000. A small $500 or a $1,000 bid could make the difference if another bidder is close to their limit.

We also advise that our clients have a Solicitor inspect the Contract of Sale. If you do not have a Solicitor we have Partners who can give you advice in this regard. Even if you have reviewed the contract before Auction day, it is a good idea to review the Contract of Sale on the day to ensure there have been no late changes to the paperwork. The contract will be at the Auction Site on display and the onus is on you the prospective buyer to read and understand this document. Caveat Emptor - Buyer Beware! It is important to clarify details such as settlement terms, deposit and fixtures before an auction commences.

MORPHEUS Bidding

At Morpheus Property we like to keep some simple rules in mind. If clients have contrary instructions we like them to speak up and tell us of any concerns. It’s always better to know of any of these concerns before the Auction starts.

It is important not to be drawn into a bidding war on a property. Emotion can lead to you paying more than you can afford and as I said earlier there is no cooling off period with an Auction. Martyn (my business partner) and I have no emotions. I am a Lawyer and he is an Accountant. Enough said! The unfortunate thing is that Martyn being an accountant also means he has no personality either ... hee hee ... don't worry Marty loves it when I make fun of him!.

We will ensure that the Auction is conducted in accordance with our client’s instructions with no temptation to over step the mark on the day.

At the end of an Auction, we celebrate a successful purchase and it's time to break out the champagne! As you can see, Morpheus Property has the experience and skill to save you stress, time, money and from making a costly mistake in any situation.

Tip: All sound too scary? ... Well worry no longer! We love Auctions and the challenges they present. If you think it is all too much, then contact Morpheus Property on 1300 727 586 and we will gladly step in as your representative.

Yours in property

Building and Pest Inspections - Not Just Protection!!

You have a property in your sights and you've signed a contract subject to a building and pest inspection. Excellent work, but what do you plan on doing with the report?

Generally, you would expect one of three results from your building and pest inspection:
1. Nothing wrong - the building's perfect!
2. Some problems need attention, but not enough to let the contract fall over.
3. Disaster - Run awaaaaaay!

Personally, I don't believe a perfect property exists, so if the property comes back with a clean bill of health, I would question how hard they looked!

In reality, you're more likely to be faced with issues ranging from minor repairs right through to significant structural of pest issues. What can you do when there are issues, but you're still interested in the property? Most buyers believe your options are limited to either complete the purchase or pull out. Investors rarely consider using this as tool for a second round of negotiations.

To do this, you should carefully consider the impact of making a new offer. You may be successful, but you may also lose the property. However, if you believe there is significant work to be done and you need an adjustment to the price to make it an acceptable deal - you should ask for it!

Tip: Make sure your building and pest inspector is qualified and gives you a written report to best suit your needs. Each issue raised in the report should have a cost-estimate for resolving it. Some do this well and some do not. If you want to know who are the best in your area, contact us on 1300 727 586.

Remember, if you intend to buy at auction, get your report early!

Yours in property

Who represents who at an auction?

At a typical auction, you will encounter the following parties:

1. Vendor (selling party)

2. Real Estate Agent/s (or "vendor's agent")

3. Auctioneer

4. Bidders

5. Buyer's Agent

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When you're the buyer, who's acting in your best interests at an auction?

We can obviously rule out the vendor, as they are trying to get the highest possible price for their property. Who can blame them?

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To get the highest price, the vendor uses a real estate agent (or "vendor's agent"). The vendor's agent will promote the property and try to attract as many buyers to the auction.

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The vendor's agent will often give you advice about how to increase your chance of 'winning' at auction. This blurs the relationship between agent and buyer. Many buyers have the mistaken belief that the vendor's agent is acting in their best interest. Remember, the vendor's agent has a legal obligation to achieve the highest possible price for the vendor, so take this advice with a pinch of salt (or a good sense of humour).

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The auctioneer also works for the vendor. Their role is to drive the price as high as possible. Some of the tactics used by auctioneers are questionable, as highlighted in REA blog article "The Turkeys are out"

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It's common to see other agents floating around the auction, offering 'advice' to buyers. This typically sounds something like, "Just one more bid of $5k and I'm sure you'll knock out the competition", "Put in a strong bid and you'll end this quickly", etc. These agents are sometimes easy to pick, especially if they're wearing a uniform or displaying a badge. However, some operate a little more covertly. This is where I would recommend all buyers to be careful about how openly you discuss your bidding strategy. It's not healthy for your auctioneer to know what your highest bid would be.

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The auction is packed full of people, but how many are serious bidders? A trained eye can eliminate the 85-95% of bidders who are the vendor's neighbours, family, friends, spectators, etc.

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So, who's left? The Buyer's Agent is the one person acting in your best interest. A good Buyer's Agent will develop and document a bidding strategy before you start, but remain flexible to take advantage of opportunities as they arise. A good Buyer's Agent will also ensure you stick to your bidding limit when the bidding gets out of hand.

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Want to learn more about auctions? Call us on 1300 727 586 or send us an email - enquiries@morpheusproperty.com.au