Rule 7. Keep your highest price a secret

Once the home reaches the sellers’ lowest price (the reserve), it is going to be sold to the highest bidder. Let’s say $320,000 is the reserve and your highest buy price is $350,000. Under
no circumstances will you exceed your highest price (you can’t afford to).

But you are very likely to be the highest bidder long before you reach your highest price. If there is another bidder whose highest price is $330,000, then you will buy the home at the next bid above $330,000 which will most likely be $331,000. And you will save $19,000.

Thousands of buyers are paying thousands of dollars below their highest prices at auctions. All because the agents do not understand the principles of negotiation. As one buyer said, “It is like stealing money from the sellers. Why do the agents let this happen?”

The losses for sellers and the wins for buyers are caused because the auctions start at a low price instead of a high price. And when something starts low, the chances are that it will finish low – or at least lower than it would have finished if it had started high.