Tactics, tactics, tactics ...

There are times of gloom, doom and distressed sales. Then the pendulum swings and everyone on the selling side starts to grin and we're into (irrational?) exuberance. Same as it ever was.

Markets change, practices change. So what can you do to stay ahead of them?

Always ...

• Decide how much you are prepared to spend. And stick to it.
• Get a friend. Someone who is not emotionally involved – who can see flaws you may be prepared to overlook and who can stop you going over your budget.
• Don't move in. In your mind, that is. Auctions can be lotteries. Always be prepared to walk away. Always.
• ... but move in. Is this the right house for the way you live? Is the floor plan workable? Is the garden? Is the district? Use your imagination. 'Live' in the house, in your mind, from morning 'til night.
• Don't match the vendor. Vendors bid in hope; so don't assume that's as low as they will go. If there's no interest at that level, reality quickly kicks in. Do not assume that any figure you hear, at any time - including before, during or after an auction - is non-negotiable.
• Beware of dummies. While the law has changed (we helped change it) it has not stamped out the practice. Dummies are often friends of vendors keen to get a "legitimate" bid on record before a property is passed in. That last bid is not necessarily a bid you have to match. (There's more about dummies below.)
• Beware the phantom of the auction. An auctioneer's assistant points to a face in the crowd: "See him? He's interested. You should knock him out before he bids." Really? Believe that and you'll be bidding against someone who hasn't made a bid and probably never will. You'll be bidding against yourself.
• Beware the phantoms of post-auction. In post-auction negotiations you're told others are interested. You find yourself having to bid against them. (You're boxing a ghost.) You can be almost certain that whatever interest there is will be exaggerated. Put an end to it. Demand to know what price will buy the property. Then work down.
• Be ready to say "NO!" When the other side knows you are prepared to walk away, they are much more likely not to waste your time or to attempt many of the games they would like to play. Use your own words  for: "You have another buyer prepared to pay more? Good luck to you. You can take my offer now or call it quits."
• Make your offer work for you. If you're thinking of putting in an offer before an auction, get to as many inspections as you can. Sniff the air. Smell the interest. Suggest you want to make an offer and see how keen the agents are (the keener they are, the more likely yours is the only serious interest they've had). When they ask for an offer, tell them that you want to know at what price the vendor will sell. How they respond is another measure of how keen they are.
• Establish the true price. Checking with competing local agents, who probably know the property, can provide clues. Buying local market reports (providing you’re comparing apples with apples) can be a big help. Keeping a close eye on similar properties in similar streets will, in time, give you a reasonably accurate feel for what’s right
• Do your homework. As soon as you have decided on a property, it's time to start finding out as much as you can about it, the agent and the vendor. Get a building report, then go to work on what you need to give you an edge. Are there many people at inspections? Is the talk among other possible buyers positive or negative? Is the agent smug or humble? Take it all in. Agents "condition" sellers. You can do the same to them. Suggest you may be interested in bidding. Ask for confirmation of the expected price. Suggest that's ridiculous. Make a low offer and insist that it's conveyed. Don't pay much attention to what is said, concentrate on how it's said.
• Tap into the hidden market. Phone agents and ask about what's yet to be listed. Put feelers out among your friends. Contact us.

When the market is rising ...

• Don't be misled by agents who under-quote. Do your own homework. See what similar properties have sold for in similar areas. Work to your limit, not theirs.
• Establish "your" value. When you do your homework, you should have a reasonable fix on what a property is likely to fetch on the market. But what it is worth to the market is not exactly what it is worth to you. If there are items you know you will have to change, then add their cost. If the property already has features you know you must have, and would have to pay more for elsewhere, then take those into account. If it's simply a property to die for - and there is no other like it - then add a personal premium; but don't go crazy.
• Impossible-to-find properties can still be found. There was a time when auctions were it. Today, around half the houses we buy are not even listed by agents. Especially at the top end, vendors avoid the hassles of agent selling. They don’t want parades of strangers tramping through their houses. Be ready to tap into the hidden market (see above).
• Remove the rose-tinted glasses. You need some Wow! If you’re not in love with a house within a few minutes of walking inside, walk out. But Wow! can mislead if it persuades you to overlook more fundamental needs. In restaurant terms, "Wow!" is the aroma of a fabulous sauce, but make sure the whole meal lives up to your first impression.

When the market is shaky ...

• Be patient. Rising markets mean anxious buyers, falling markets mean anxious sellers. You're buying in a falling market? Be patient. There may be less choice available than in times when prices are rising, but the bargaining power is yours.
• Know your vendor. Even amid chaos there are pockets which will hold up but, even within those pockets, there will be vendors praying for buyers to rescue them from the financial holes they have found themselves in. To them, price becomes less important than a quick sale.
• Make your own rules. When the market booms, the agents make the rules. When it shakes it becomes the buyer's turn. You want extended terms? They're possible. An offer subject to building inspection, solicitor's contract approval and/or finance? They're possible. The "standard" 10% deposit? Not now. Try $10,000.
• The ticking clock: "My offer is good until 3 o'clock, then drops by $100,000," will concentrate the minds of estate agents like almost nothing else.
• No house is priced too low to pass up. Clever buying? Not always. You'll be living your life there. You need to love where you live.

The games dummies play ...

Illegal? Yes. Still around? Yes (see above). So how do you deal with dummies?

Start by not going along with the auctioneer. They're playing serious games with you. You can play too:

• Arrive 20 minutes before the auction and see whether any last minute instructions are being given by the auctioneer or agent.
• Ask the auctioneer (loudly) whether there are dummy bidders. If the answer is no, ask the vendor. If they are playing games, you won't get an honest answer, but you will rattle any dummy within earshot.
• Before the auction starts, go ahead and ask people why they are here and whether they're dummy bidders. Watch for red faces. Most real bidders have someone along for moral support. Suspect the lonely; especially if they seem blase.
• Family photos on the mantelpiece? Are any of those faces among the bidders?
• Suspect close scrutinisers of contracts of sale. Genuine bidders usually do that well beforehand.
• Unfamiliar faces. You may have been looking at similar houses for months. In that time you'll learn to recognise most genuine bidders.
• When the auction starts, stand next to the auctioneer and face the crowd. Can you see the bids the auctioneer says are there? If not, ask the auctioneer to identify the bidder.
• Pay attention to people who bid almost before the auctioneer asks them to: the finger raised even before "Who would like to give me $50,000 more?" is said.
• Don't trust bidders who are on the phone - there's a good chance they're talking to the vendor.
• Keep one eye on the auctioneer. Are bids coming after a collar is adjusted or a nose scratched? See if you can find a pattern.
• If a property is passed in to you and someone else who has been bidding still wants to be involved, there's every chance the dummy's game is still being played. Make your offer and demand an immediate answer.

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