In her time working the auction circuit, Rhiannan Jenkins, founder of Sourced Property and REBAA’s NSW State Representative, has learned that an auction isn’t necessarily over when the hammer falls. One sale proved it in spectacular fashion… it was the day her clients won as the underbidders.
It was 2023, and the short-lived NSW First Home Buyer Choice scheme was in full swing. First home buyers purchasing up to $1.5 million could opt to pay an annual property tax rather than upfront stamp duty, and the incentive sent a wave of eager young purchasers surging into the sub-$1.5 million bracket. The market was running hot, and plenty of the bidding was driven by emotion rather than arithmetic.
Rhiannan’s clients weren’t first-home buyers. They were a family searching for a home in precisely that contested territory, which meant going head-to-head with buyers chasing the concession. When the right property surfaced, Rhiannan tried to secure it pre-auction, but the vendors wouldn’t sign. They wanted their auction, and in a market like that, who could blame them?
Auction day drew a huge crowd. Rhiannan had already prepared her clients for the possibility of missing out: too many bidders were running on adrenaline. Sure enough, after an opening flurry, the field narrowed to two parties – it was now Rhiannan versus a young couple of first-home buyers. The bids climbed until the price pushed past her clients’ limit, and Rhiannan stopped, a decision made together with her clients before the auction itself. The young couple claimed victory with a final bid just one small increment above Rhiannan’s.
Her clients were bitterly disappointed. Then came the twist. Inside, signing the paperwork, the winning couple realised that their final bid, had sailed past $1.5 million, not only beyond the scheme’s threshold; it was also beyond what they could actually afford. A desperate call to their broker, made right there and then, confirmed it: the money wasn’t there. They had to retract.
The selling agent walked straight over to Rhiannan with an offer: meet the final bid, and the property was theirs. It was only marginally more than her clients’ ceiling. Their disappointment of just missing out was still raw, and her clients had spent the intervening minutes wishing they’d pushed a little harder – so they jumped at it. Contracts were signed, and the underbidders won the auction.
Rhiannan draws two lessons from that remarkable afternoon.
First, never leave an auction, even when you’ve been outbid, because you simply don’t know what might happen next.
Second, even though Rhiannan had done stress testing of the walk-away price prior to the auction, it’s imperative that the client does their emotional work well before auction day, not during the event. Replicate the pressure of auction conditions as closely as you can beforehand, so clients genuinely understand their limit before the adrenaline hits. Rhiannan calls it incrementing until you reach your “sickening price” – finding the number your client would feel almost unwell paying. Get that right, and whatever the auction throws at you, your clients will know exactly where they stand.
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