More properties are being sold in quick-fire bidding wars than ever before and the veterans are cleaning up. I was sitting at News Cafe with one of our analysts, when he began telling me how, with the property market turning, he was certain the only way to pick up real deals was through auction houses. After telling me (what sounded like a tall tale) of a friend of a friend who’d picked up a vacant plot for a R100, I became intrigued. I’ve heard of secret bank lists that sometimes do the rounds (I have yet to get my hands on one), but with auctions becoming more popular by the month, I decided to do some digging and present you with four vital tips on how to take advantage while the getting’s good.

There’s been an uptick in the number of properties going under the hammer. Just recently, Remax South Africa announced it would be partnering with Yellow Hammer to supply auction services. While Lew Geffen Sotheby’s International has created its own auction house in Saville Row Auctions. These companies are responding to the increased demand for auctions.

According to the Alliance Group, it’s the luxury sector that’s feeling the pinch at auction, with 18% (by value) of the market being sold in this sector. That equates to 1 200 homes being auctioned every month. With supply creeping up, prices are only going one way, and it’s time to look at how you can turn this to your advantage.

Tip #1 Do your research

If you’re used to trawling though The Star property section on a Saturday, the idea of knowing how much you can afford may seem painfully obvious. But, auctions can bring out the worst in people. When I began working for Foxtons London Estate Agents a couple of years ago, the first thing that was drummed into us in property negotiation 101 was that, for most people, buying a house is the single largest investment they’ll ever make. Though you arrive at the auction with your eye on the property you want, and have hopefully done your research, not many people make this sort of decision with only one night’s sleep, let alone negotiate and seal a deal in less than half an hour. It’s easier than you think to overbid.

Tip #2 Know how much you can spend

The winning bid at an auction is a binding contract. If you’re successful, your finances must be in order before auction day. When you start searching for the “perfect” property, contact your lending institution for finance approval. That way, you know your borrowing power and can set your auction limit. You’ll need a written loan approval before the day of the auction, as well as the deposit, which is usually 10% of the purchase price. If you overbid and don’t have your finance ready in time, you could lose your deposit and be subject to legal action.

Tip #3 Set an uneven limit

When setting your bidding limit, an old pro’s trick is to set an uneven bidding limit. Most people limit themselves to a round number. Sometimes just having an extra couple of grand can swing the decision in your favour.

Tip #4 Get to the auction

On www.yellowhammer.co.za you can browse properties that’ll soon be ripe for bidding. After finding your dream home, you contact the agent attached to the listing. Then request a pre-registration form. Once completed, you’ll be pre-allocated a bidder’s number, which you can collect and sign for on the day of the auction. There are usually two days on which you can preview the house prior to auction – one several weeks in advance and the other just days before. It is suggested that you attend both, confirm for yourself your decision is right, turn up at the appointed place and enjoy the ride.