Buyer bids late to bag $810,000 Glen Innes home - but expert says strategy rarely works

Hushed whispers and nervous laughter spill across the room as the auctioneer announces he's looking for a "fair and reasonable opening bid".

The property in question is a "spacious" 69sq m two-bedroom home in Castledine Cres, Glen Innes with open plan living and polished wooden floors.

READ MORE: How to win an auction: The top tips for getting your dream home

Built in 1950 it sits on a generous 682sq m section and has a CV of $590,000.
The weatherboard house is lot one at today's Barfoot & Thompson's Shortland St auctions with several registered bidders lined up to go head-to-head.

Advertisement

Experienced Ray White auctioneer Wayne Maguire revealed in today's Herald insider tips he says will make bidders more confident and competitive, to help blow rival buyers out of the water.

But would the advice work in practise?

We spent the morning observing the auction process to gauge different bidding strategies, employed to varying degrees of success.

The auctioneer suggests a starting bid of $700,000. For the next few minutes a phone bidder battles it out with a man in paint-splattered shorts, jandals and a grey hoodie - trading $10,000 blows.

"Are you back in?" the auctioneer asks the man during a pregnant pause in bidding.

"He's doing his numbers but I think he needs a new calculator."

At $790,000 with the reserve not met, we take a break for whispered negotiations to see if more money can be pried from the lead contender.

Steely Dan plays over the sound system to help calm frayed nerves.

The man ups his offer to $800,000 before a new bidder comes out of nowhere - making a late play.

We're on the market and with no further offers the hammer drops and the property is sold for $810,000.

The winning bidder is 28-year-old pediatrics nurse Jenna Flavell-Neville.

She and her partner intend to live in and renovate the property by adding a third bedroom.

Ms Flavell-Neville admits she was nervous ahead of the auction but had a clear budget limit and bidding strategy planned out.

Her late bid was designed to avoid getting into an early bidding war, needlessly inflating the price, she says.

"We've lost out at auction a couple of weeks ago because we tried to be confident and the bidding just went up by $100,000 really quickly. So this time we thought we'd wait until it came on the market and then we'd bid. We nearly missed out because they almost passed it in."

Ms Flavell-Neville agrees the auction process pits buyers against each other, with the potential to induce reckless spending.

"You want to be the winner. I think I would have kept going for a bit longer just to win. But you have to have a hard limit.

"From what we've seen it seems the less people who are bidding the better because they just egg each other on."

And her tactics paid off. She picked up the property for $30,000 below what they were prepared to pay.

However, Barfoot auction manager Campbell Dunoon says delayed bidding is a dangerous strategy which can easily backfire.

The Glen Innes property that Ms Flavell-Neville fought for and won. Photo / Supplied
The Glen Innes property that Ms Flavell-Neville fought for and won. Photo / Supplied

"People who leave it to the last moment ... think they're being strategic. It rarely works. It usually works against them, particularly if an auctioneer doesn't see the bid."

In a multiple bidder situation, the auctioneer was focused on those who were already bidding, "trying to coax them to bid more".

Buyers who waited till the death risked missing out because they hadn't participated.

"You're very late to the process and I don't think you have that confidence in yourself."

He advised would-be buyers to be prepared, know their limits and to discuss "what if scenarios" ahead of the auction - in case bidding went just beyond their prearranged budget.

An early bid helped overcome nerves, build confidence and get buyers "off and running".

"With the auction process, when it's sold, it's done. There's no second chance."

Back on the auction floor, the room has thinned out ahead the All Blacks v Samoa test match.

A man in shorts and a Puma sweatshirt holds his nerve on lot 4 - picking up the four-bedroom Glendowie family home for just shy of $2 million after a frenzied bidding war.

But a well-to-do couple miss out on a three-bedroom Remuera Rd property after it sells to another bidder for $1.41 million.

Asked about their bidding strategy, the woman says, "We didn't have a strategy."

"Put a hand up," chimes in her partner.