Auction strategy

Winners are grinners

Originally uploaded by 4ndrewScott.

There are plenty of house-buying strategies out there, but the one I used on the weekend is supported by some common sense theory, is not illegal, but most importantly can actually work: we are now house-owners! I figure I won’t be needing to use this one again soon, so I’m happy to share it with anyone else who is bidding at auction.

Firstly, there are two possible auction outcomes: either the property sells at auction, or it doesn’t. If it doesn’t, then any bids you’ve made simply provide the vendor with a position to negotiate the price up from. So, it’s better if you haven’t made any bids in that case, and you can simply begin negotiations directly when the auction finishes.

In the case it’s going to sell, the property will go on the market at some point, and the auctioneer will indicate this by saying it’s “on the market”, it “will sell”, or something like that. After this has happened, you should begin to bid.

As auctions are a painful thing, pretty much anyone prepared to bid at one will have rationally thought out what their limit is, before they go. If your limit is below anyone else’s, you aren’t going to win. However, auctions aren’t a completely rational environment.

Auctioneers are very good at putting on a show, pressuring bidders, and otherwise channelling PT Barnum. Most people have an “emotional limit” that is higher than their “rational limit”. If they used their credit cards, sold some shares, restricted their lifestyle, borrowed a bit from a mate, or did something else that they don’t really want to do, then they could go beyond their rational limit. The auctioneer’s goal is to have people bid well above their rational limit, up to their emotional limit. Even if you have the highest rational limit, you will lose the auction if anyone’s emotional limit is higher than your rational limit.

The mechanics of auction are such that the winner is the one that’s prepared to pay the most, but they only need pay as much as the loser would pay. For example, if a person who is willing to pay up to $200,000 is bidding against another who is willing to pay up to $300,000, then the latter can win by paying $200,001. So, even if your rational limit is higher than everyone’s emotional limit and you win, you will pay a price equivalent to the loser’s emotional limit.

No legal auction strategy can lower people’s rational limit, but a good auction strategy can keep people’s emotional limit to close to their rational limit. This can save you money and may even win you the auction. Unfortunately, the auctioneer is trying to do the opposite, and push the emotional limits of the bidders.

So to beat the auctioneer, you need to join them. They power dress to impress, they stand at the front like a teacher at a class, and they whoop and shout to whip up the emotions. To counter this, you need to dress as a real-estate agent in a dark suit, stand at the front near the auctioneer, and every time the bid increased by someone else, calmly but immediately increase it yourself. You should look like someone with infinite patience and a infinite limit, and who is there to buy.

I felt a little silly, standing up there alone in my suit near the auctioneer. The auctioneer knew what I was up to and started to ignore me. When someone else bid me up, he wouldn’t come back to me straight away, so I had to shout out my bids in order to regain the lead. I think we would’ve won anyway, but this strategy probably saved us a few thousand dollars.

Chopper Reid meets Rudyard Kipling

It’s one of those books that you get recommendations on from many sources, but for one very important reason you never start it: it’s over 900 pages long. However, once you begin, you somehow finish it in a week.


Australian bad boy’s overseas adventure

Melbourne’s own Gregory David Roberts is a criminal, but a writer first. This is what allows the first paragraph to draw you in, and the first page to engage you with his story. And what an amazing story it is.

It falls into the genre of “fictional biography”. I guess this means that you can’t take everything he writes seriously, but this does detract from the power of the biography. I found myself wondering whether particular elements could possibly be true – a question you would not ask if it was either “fiction” or “biography”.

Certainly, Roberts seems to have more adventure in the few years he was in India that any one person deserves to have, and probably more than several people put together could even manage. And when you consider how many languages he learns, how many deep philosophers he encounters, and how he is somehow still alive, it stretches incredible towards incredulity.

I choose to believe that he really did do it all, or at least close enough to it. Others may not. But, it makes it easier to seriously consider the ethical positions he raises, analyses and resolves. I like that sort of thing.

Another thing I liked was how it gave me a bit of an insight into the life of someone like Guantanamo Bay inmate David Hicks. There are a couple of things that are common to them both, and Hicks is such a thinly represented character in Australian media that it can be hard to understand the motivations of such a person. This book provides a glimpse into the background required.

I think someone once said that the best literature is something like a shaggy dog story. I’m not sure this is the best literature, but it’s one of the best shaggy dog stories I’ve read.

My rating: 4.0 stars

It turns out that Roberts has now gone back to India. According to his book’s website, he’s now doing charitable work in Mombay.

Trip to Perth

On the weekend, I was in Perth for my grandfather’s birthday. It was a very relaxing trip, and even so I was able to catch up with quite a few friends and family members. Plus, the weather was nice, so I also got to swim at the beach. All up, very restorative.

There are some things about Perth that make the place very special (some would say “stuck in time”, but that’s a bit mean). As well as the lack of daylight savings, extended trading hours and pokie machines in pubs, there’s an easygoing lifestyle and pace that suggests a level of contentment now rare here over east.

Another thing they’ve got is wildlife. In some suburbs, it’s not uncommon to find snakes in your backyard. If you go to Rottnest, you’ll certainly come face to face with a quokka at some point. Also, the many parkland reservations throughout the city host bigger animals like kangaroos. This photo was taken in a reasonably old suburb that’s about 10-15 minutes drive from the centre of town. My parents live nearby, and the kangaroos are a daily occurrence.

The AFL Grand Final as a spectator

We went to the AFL Grand Final on Saturday, to see the West Coast Eagles win by just a point. It was a frustrating game, but it was very exciting towards the end as Sydney Swans came from hugely behind to close on the Eagles. (And let me say that if you’re going to have a mascot, one based on a bird is guaranteed to look like a chicken. Except if it’s an Eagle, of course).

Anyway, it was the second time I’d been to a Grand Final, but the first time I’d seen the game from the stands. Back in 1997, we were there as part of the talent. Not the sporting talent of course – we were in the pre-match entertainment.

It’s still run by Kerrie Hayes Productions. And they still teach the same dance moves. As the little people dressed in black waved their arms to Up There Kazaly, my arms twitched in synch.

It was much better to be in the stands. You could see everything and there wasn’t a costume. The only way to get a birds-eye view from down on the ground was to dress as a chicken.