'Stay outside to negotiate': Nicole Jacobs reveals three auction tricks no-one tells you

When you have been buying and selling properties for many years, you get to know a few things. Partly it is being able to read people, but there is also knowing the vagaries of vendors.

Here are just a few tips you can use that you might not otherwise consider.

1. Sometimes you will be fairly confident, based on who is at an auction, that you are willing to pay a price that will be a knockout blow to most of the other prospective buyers.

Before you do that, though, ask the selling agent whether the vendor wants to see the competition on the day: that is, the auction is the only way the vendor will meet the market because they have witnessed what the market—the buyers—are prepared to offer.

They might want to ensure they’ve exhausted what the market is willing to pay. If you go in hard and make the only offer, even if it is something they find perfectly acceptable, they might want to hold out for more (human emotion takes over).

If this is the case, start lower so that a few more people bid before you deliver your best offer and the seller who wanted their moment in the sun will likely be satisfied that they have exhausted what is out there.

2. If you are at the end of an auction, the property hasn’t reached the reserve and the agent invites you inside to negotiate, you can ask to stay outside to negotiate.

Why would you do this? There is nothing that cannot be negotiated on the front lawn or footpath and it is much easier for you to walk away from a negotiation that is not going the way you want it to while you are on the front lawn than if you are trapped in the vendor’s living room.

You will also have the opportunity to see who else is hanging around and whether they are indeed real buyers and maybe competition. If you do go inside to negotiate, have someone outside checking whether there are other buyers out there or if there are just family and neighbours left.

Quite often an agent will play on the possibility that there is another willing and able buyer outside, ready to take up the negotiations if you don’t pay the reserve amount.

I personally know of an agency that employs a family to wait outside some post-auction negotiations to put pressure on the real buyer inside. When you attend as many auctions as I do, you get to recognise who is who.

3. When negotiating make your final offer an unusual amount. I often add a random figure like $800 to a price—so instead of giving a selling agent an offer of $2,750,000, I might instead choose $2,752,800—and tell the selling agent that the buyer is tapped out, so much so that the final $800 is going on their credit card. It gives the selling agent a story to take back to the vendor, and sometimes that is all you need to wrap up a sale.

This is an edited extract from SOLD! by Nicole Jacobs published by Hardie Grant Books RRP $29.99 and is available in stores nationally.