Desperate home buyers enlist professional bidders to attend 'pressure-cooker' auctions

Home buyers desperate to secure their dream home or simply get into the fast-rising property market are enlisting professional bidders to help gain the upper hand at auctions.

In Melbourne, where the median house price has surged by 7.3 per cent in the past year, a new company called 1300Bidder has just launched to provide professional bidding services to home buyers.

Partner Barry Feldman, a licensed real estate agent and auctioneer, says 1300Bidder was created to “make it affordable for anyone to have professional bidding on your behalf at auction”.

While buyer’s agents and advocates have been assisting Australian home buyers search and secure properties for years, an increasing number of people who often feel “intimidated” by the increasingly competitive auction environment are paying professionals purely to bid on their behalf on auction day.

“We’re not buyer’s advocates, we just bid at auctions,” says Mr Feldman, who adds that their experience as licensed real estate agents can give inexperienced buyers a significant advantage on auction day.

“The thing is, most people will only buy a property about three times in their lifetime, so it is not uncommon for buyers to feel intimidated at an auction, by the auctioneer and other bidders,” he says.

“We use a range of different strategies and we also take the emotion out of it for the buyer. The client can give me their reserve and then stay in the car. I don’t have any emotion when I bid because it’s not my money.”

Mr Feldman says the company also bids on behalf of clients who want to remain anonymous or who can’t attend an auction in person because they are interstate or overseas.

Frank Russo from Search Find Invest in Sydney, where house prices soared by 8.5 per cent in the March quarter alone, says he has never seen the city’s auction environment so emotionally charged.

As a result, the buyer’s agent says he has seen demand for his auction bidding services increase substantially in recent months.

“Auction bidding is not my core business … however, I have been doing a lot more of it. I had three auctions on the weekend where I went along purely to bid on behalf of my clients,” he says.

“I think in this market buyers are trying to get some sort of an edge, and a professional bidder can give them that edge and it also means they don’t have to put themselves in the pressure-cooker situation that comes with bidding at an auction themselves.”

Mr Russo said emotions were particularly high at one auction he attended on Saturday in Maroubra, with one family member dragging another member away to stop him from bidding any further. The underbidders later complained to the auctioneer for creating such a pressurised auction.

“I think the stakes are even higher at the moment because of this rising market and people are attending auctions having already missed out on other properties, so there is a lot of angst among bidders,” he says.

Mr Russo says having a professional bidding on your behalf can also help buyers avoid getting caught up in the emotion of the auction and paying too much for a property.

“The whole auction environment is designed to be competitive … and even on the weekend we had two situations where we had advised our clients prior to auction what a fair price was to pay, and where to stop, and on both occasions, they got to the auction and got caught up in the emotion and wanted to go above their limit,” he says.

“Sometimes your role is to protect your client from themselves.” 

Frank Walmsley from Auction Advantage in Canberra says he has also seen an uptick in inquiries in recent months as Canberra’s median house price experienced its steepest annual increase in 17 years – up 19.5 per cent in the year to March.

He says he has also noticed home buyers becoming “increasingly frustrated” when attending auctions because many price guides in the fast-rising Canberra market are so inaccurate.

“I am definitely getting a lot more calls from people seeking tactics and strategies around how to bid at auction and the pre-auction process,” he says.

As well as bidding at auction on behalf of clients, the experienced auctioneer also provides pre-auction advice.

“Sometimes a client’s auction will clash with one of my own auctions, so I also coach people on the things they can do to strengthen their position prior to the auction,” he says. “it just gives them that added confidence.”