Tricks of the trade – 5 tricks to make you spending more money
An auctioneer has just one job, just one objective and that is to get the most amount of money for their vendor – the house owner.
With house prices going for more than 20% or greater over their quoted value these days, it pays to be aware of the trick’s auctioneers use to get you to part with even more of your hard-earned cash, when it comes to buying a new home.
Below are five techniques auctioneers use to encourage you to bid more than you planned.
TRICK NUMBER 1
Even been at a house auction and had the auctioneer come up to you beforehand, shake your hand, look you in the eye and start chatting about something you might have in common? What a nice guy you probably thought. I’d invite him to my next BBQ!
Well think again. What he is really doing is warming you up, forming a bond, gaining your trust. According to psychologists this makes you more likely to respond to him during the auction. More likely to make that opening bid or pay that extra $5,000 or $50,000 more than you intended.
Don’t fall for this best mate trick.
TRICK NUMBER 2
Trick number 2 is even trickier than the first. Good auctioneers are trained to use the tempo (or the speed) of their voice to weasel more money out of you.
If an auction is going well, they will speed up their voice, talking faster to create a sense of urgency – this immediately appeals to FOMO, that fear of missing out. Before you know it, you have upped your bid.
When the auction slows, their voice slows, and they look to hold eye contact with you – almost guilting you into getting back into the race.
But just remember, it’s your money – you are the one in control of how you spend it.
TRCIK NUMBER 3
The third trick requires a prop, the gavel, which is that small hammer auctioneers, and judges, use to control the room. The gavel is traditionally a symbol of authority and auctioneers are versed in using it to control you. Using the gavel as a bluff in the middle of an auction creates a sense of urgency – feeding that old chestnut, our fear of FOMO. By raising it and looking like they’re about to end the auction it makes you freak out that you haven’t had a chance to make your final bid unless you act now.
And before you know it, it’s gone once, gone twice, gone three times and sold to the fool in the cap who just paid a hell of a lot more than he meant to.
TRICK NUMBER 4
A good property agent will have done their homework on the potential bidders and have a fairly good understanding of each serious bidder’s situation, including their budget and what makes them tick – and briefed their auctioneer.
If the agent has done their job well, when it gets down to the pointy end of the auction when there are usually only two bidders left, you can rest assured that the auctioneer will know what appeals to the potential highest bidder most about the property. So don’t be surprised when they start telling you about what makes that property so special to you – maybe it’s the original wooden floors, the proximity to good schools, flexible floor plans…
Don’t be fooled, they are just telling you what they know you want to hear.
TRICK NUMBER 5
Last but not least, they use the Jedi mind trick known as Anchoring. This is a well-used negotiation tool whereby we rely heavily on the first piece of information we are given about a topic.
Auctioneers use it by starting the auction with a figure that is a lot higher that what you were ever thinking of paying.
You’ve heard it … “Who wants to start the bidding with $1,000,000?” Well, if you’re in Sydney suburbs this might not raise an eyebrow. In Adelaide, it might make you spit out your cappuccino.
What it does, is play with your subconscious, encouraging you to lift your expectations (and your budget) to a higher level.
A skilled auctioneer is a master at getting you to bid more than what you ever intended to pay. Are there any other tricks you have seen them use?