How to bid and win in an auction: Expert tips

Auctions can be intense. The pace is fast, emotions run high, and bidders wear their hearts on their sleeves. It can feel like a high-stakes performance where one wrong move could cost you the deal. 

But buying at auction has its perks. There's no second-guessing or behind-the-scenes negotiations – everyone sees what's on the table, and the home goes to the highest bid, fair and square.

Whether you're stepping up for the first time or just want a winning edge, this guide covers everything you need to know before bidding day – including proven auction strategies from Apollo Auctions director and auctioneer Justin Nickerson.

All you need to know before bidding at an auction

Before we get into expert winning tips, it's important you're across exactly how auctions work and what you need to bid at one.

What is an auction?

An auction is a public sale where buyers place bids on a property, with the home selling to the highest bidder (assuming the seller's reserve price is met). It's a transparent process, often fast-paced, with no cooling-off period once the hammer falls.

Do I need to register to bid at an auction?

You must register to bid before the auction begins, and this typically involves showing valid ID and filling out a registration form. Registration is free and usually happens on-site before the auction starts, but some agents allow online or pre-auction registration too.

What's a reserve price?

The reserve price is the minimum amount a seller is willing to accept for their property. If bidding doesn't reach this amount, the seller isn't obligated to sell. A property is declared 'on the market' when bidding reaches the seller's reserve price and the home will sell to the highest bidder.

Can I negotiate before or after the auction?

Yes. You can make an offer before the auction. Some sellers may accept it. If the property passes in (ergo, doesn't sell at auction), the highest bidder often gets the first opportunity to negotiate with the seller afterward.

Winning tip #1: Know these three important numbers

Walking into an auction without a clear auction strategy likely won't pay off – it could even see you paying tens of thousands more than you wanted to.

That's why Mr Nickerson suggests having three numbers in mind:

Your dream number

"The dream price is the one you'd love to buy it for," he told Your Mortgage.

"That might be a number that you start the auction off – it's a no-brainer to buy at that kind of money."

Your fair number

Your ideal number is what you think the home is likely worth.

"This is where you think it's likely to sell – what you think is about fair for the property," Mr Nickerson said.

Your walk away number

"The last one is your absolute, beyond which point you walk away, you've tapped out, and you can't go any further."

"The strategy should be to pay inside those three numbers," he continues.

"So, you might start it off close to your 'dream number', bidding really strongly up to the 'fair number' to set the pace, and then from the fair number you might be more circumspect [and] look to slow the bidding down by bidding smaller amounts, all the way up to your 'walk away' number."

Winning tip #2: Be prepared to play and don't show your cards

Many buyers walk in without a clear strategy – or worse, they freeze mid-auction and hope for the best.

"That's rarely successful," Mr Nickerson said.

"You need to bid to actually buy the property."

He also cautions against trying to slow things down too early – especially if you're still in your 'dream price' range.

"It can send distress signals to your opposition," he said.

"[You're] telling them, 'hey, I'm in trouble already,' which gives your opponents more confidence to keep bidding."

Winning tip #3: Remember, the first bidder most often wins

While Mr Nickerson notes he's biased ("I'm an auctioneer, and I like bidding," he said), data suggests the bidder who gets in first most often wins the race.

Apollo Auctions conducted more than 7,500 auctions last year and found 68% of the time, the bidder who makes the first move walked away with the property.

"It's actually an advantage to be leading the way," Mr Nickerson said.

"It means you're going to set the price it starts from and you might show a bit of confidence, which may spook or scare the other bidders out of bidding somewhat."

Winning tip #4: Be ready to win: Financially and emotionally

With a private treaty, you can usually make an offer subject to finance. At auction? No such luck. If your bid wins, you're legally bound to buy – no conditions, no cooling-off.

You'll need to pay a deposit before you leave and front the rest of the cash shortly after. If you can't follow through, the seller may keep your deposit – and in some cases, pursue you for losses if the home later sells for less.

For this reason, it's important a buyer bidding at auction is pre-approved and confident they can get a mortgage on the property being purchased.

"Sometimes people walk in without a really clear financial picture because they've seen the property late and haven't gone through the steps with a broker or their bank," Mr Nickerson said.

"Have as accurate a picture of your finances as you possibly can," he added.

"And whatever supporting evidence or documentation you can find to help you understand a property's value is important as well."

Here are some low-rate home loan deals from lenders that offer pre-approval:

Important Information and Comparison Rate Warning

Winning tip #5: Don't be afraid to ask for help

Does the idea of bidding at an auction make you want to crawl back under the covers? Would you struggle to keep a cool head when bidding on your dream home? Are you time poor as is? If so, you're not alone and you might be a good candidate for help – professional or not.

A part of a buyer's agent's job is to bid at auction on your behalf. They can help save you time and money, as they've done it before.

Or, if you're simply nervous and emotionally invested, reaching out to a family member or friend who doesn't have the same attachment as you could be worthwhile.

"There're various situations where I think your position can be strengthened by asking someone that's not emotionally engaged in that way [to bid on your behalf]," Mr Nickerson said.

What you DON'T need to worry about on auction day

All that said, auctions can still be scary places to be. The media can hype up the spectacle of the event – not helped by ballgowns and bow ties sported by contestants on The Block.

But there's no need to stress. An auction is an everyday occurrence – thousands are held across Australia most weekends.

Here's what you DON'T need to worry about when bidding at an auction.

Unspoken auction etiquette

There's no such thing as unspoken auction etiquette – trust me, I asked Mr Nickerson.

Simply finalise your preparation, give yourself a pep talk, and follow your strategy.

Social tricks to psych out the competition

Don't try to psych out the competition with your superior property market knowledge or irritating antics. It likely won't work anyway. And if someone is trying to psych you out, go to your happy place and remember, they can't influence your strategy.

"We do occasionally have people that come with the intention of being really loud and boisterous, or asking 'are you on the market?' repeated times, or making comments to other bidders – that strategy is rarely successful," Mr Nickerson said.

"It's still going to come down to who wants the property the most and who's got the biggest budget."

What you look like or what you wear

Finally, how you present and what you wear to an auction won't have any bearing on the outcome.

"Some people dress right up, and that's fine if that's what makes them feel comfortable," Mr Nickerson said.

"Other people bid in a hoodie and track pants and if that makes you feel comfortable, then that's what you want to do."

_{Image via Canva}