Buying a home can be emotional enough as it is, even before you undergo the highs and lows of bidding at an auction. While we may not be able to eliminate the stress altogether, we can help minimise it by making sure you know what to expect before you walk into an auction.
Here are 10 top tips for preparing to buy a property at auction.
1. Do your research
Any property search should begin with a good dose of research. Get to know the area, look at recent comparable sales to get an idea of the likely sale price and conduct due diligence on the property, including a building and pest inspection.
2. Attend auctions
A good way to prepare yourself for an auction is to attend as many as you can to see first hand how the process works and observe different bidding strategies. It’s also a good way to familiarise yourself with different auctioneers, one of whom may be the auctioneer when it’s time for you to bid.
3. Sort out your finance
Before you head to the auction, you should ensure you have the necessary finance pre-approvals and a blank cheque to fill in the final deposit amount on the day. The deposit is usually 10% of the purchase price.
4. Set a limit
Unless you have access to unlimited funds, it’s important to know your limit before attending an auction. This will depend on your borrowing capacity, but also keep in mind all the extras associated with buying a home, such as stamp duty and legal fees.
5. Express interest
Once you find a property you’re interested in buying at auction, let the real estate agent know your intentions. That way you’ll be kept in the loop if any offers are made prior to auction.
6. Don’t reveal too much
Keep in mind this is a competition. Don’t reveal your bid limit to the real estate agent or other bidders on the day as they may use the information to ensure the bid goes as high as your limit.
7. Decide on a strategy
Will you bid early or wait until the closing stages of the auction? Consider all your options and devise a strategy before the big day. It will help with nerves and enable you to act quickly as the momentum picks up.
8. Register to bid
In most states and territories, only registered bidders can be in the running for the property so arrive at least 15 minutes before the auction starts to register for bidding. And bring your ID! In some cases, you may be able to pre-register so check with the real estate agent.
9. Be visible
It might be tempting to hide at the back of the crowd, but choose a position where the auctioneer can clearly see and hear you when you are bidding. It’s also handy to be able to see your competitors.
10. Bid confidently
Call out your bids loudly and confidently and state the whole dollar amount – it will remind you to stay at your limit and maybe stop less confident bidders.
Being prepared is key to your potential success. Your Aussie Broker can help you become auction fit before you hit the property trail and help arm you for success with the pre-approved finance that will work hard for you.