Auctions are often promoted as a way to drive up property prices through competitive bidding. But the winning bid doesn’t always reflect the highest amount a buyer is actually willing to pay.

At auction, the final price is simply the highest bid above the next highest offer — not necessarily the buyer’s maximum budget. Buyers often hold back their true limit, competing just enough to outbid rivals but without revealing their full willingness to pay.

This can leave money on the table. If only one or two buyers are active on auction day, there’s limited competition — and the winning bid may fall short of what could have been achieved through private negotiation or a well-marketed sale.

Auctions also place pressure on buyers to decide quickly, which can discourage serious bidders who prefer time to consider or arrange finance.

For sellers wanting to maximise their return, testing the market widely and negotiating with interested buyers privately often leads to better outcomes than the auction room’s pressure cooker environment.