Don’t Do This At An Auction (never)
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What insights does James Hayashi offer about the current auction market?
It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of The Real Estate Podcast. We're talking to James Hayashi from Ray White Eastern Beaches. Welcome to The Real Estate Podcast, James. Thanks, Craig. Thanks for having me. Great little spot there in Sydney that you're at.
We are very blessed in the markets that we work in. Best in the world, I'd say.
And we're going to have a look at the auctions. Have you found particularly through the lockdown that we have all had to endure that the number of people preferring to sell property through an auction to anything else is still sort of punching through?
Yeah, look, we saw a downturn in stock listings coming to market during the first lockdown. Things tightened up because there was a lot of unknowns and uncertainty about what the market was actually going to do. But in the second lockdown, things kept on business as usual. So the volumes didn't actually decrease. I mean, there is a shortage of stock in the market at the moment, as we've all seen. But in terms of auction listings, I think the properties were on the market, the vendors were motivated, and they obviously wanted to capitalize on the high buyer demand. Auction was the best method of sale to making sure that you can create an even playing ground for all the buyers to compete against, but also maximizing the price for your vendors too.
And when it comes to buying at an auction, some people can be quite cavalier, can't they, in terms of how they approach it, not realizing perhaps that the protocols and the rules and the regulations around it. So what are some of the mistakes, James, that people can make when attending that auction to bid on a property?
Yeah, look, I think that everyone needs to understand that the agents and auctioneers are there to do a job. People can miss out and obviously they may have been burned in auctions in the past and they take that experience to the current auction they're going to bid on. So, you know, there have been times where people have been disrespectful. there's an arrogance, people thinking that they know better than the agent, the auctioneer, not saying that we know everything, but it's having that professional respect. You wouldn't go into your accountant's office and start heckling them or making silly comments. I remember one auction that I had where one of the bidders started playing Harley Davidson videos, like motorbike videos really loud on his phone to disrupt the auction.
So I just found that was completely rude. And then also, in terms of the bid protocol, understandable that the buyer wants to buy the property as cheap as possible, but we can't take $1,000 bids so early in the auction. That typically happens at the tail end after you've exceeded the reserve or when things are slowing down.
How did the lockdowns affect property auctions and buyer behavior?
appreciating that you do want to spend your $1,000, but we need to keep it in, say, a $25,000 rise. So just understanding and respecting what the auctioneer has to say, it's a mutual engagement. You respect me, I'll respect you. Yeah.
So what do you do when, in that instance, somebody is bidding on a $5 million property and then somebody puts in a bid and then somebody else just brings it up by $1,000? I mean, what do you say to that? How do you respond?
Well, I've just got clear instructions from my seller about what increments I can take at what level. Starting at the auction, they've asked me to keep the bidding increments quite high. I appreciate you bidding your interest. I'll keep it in mind, but I have to follow my vendor's instructions and only take bids at this level right now. People will typically respond well to that because, again, it's not like I'm being arrogant saying, no, I'm not going to take your money. I can respect them making a bid. They need to respect that I'm trying to control the auction and run the process.
And what are some of the tips for anyone listening to this podcast right now who may have spotted a property that they're really interested in?
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