Things can happen very quickly at auction with the highest bid reached often in a matter of minutes. Having a clear strategy will help you stay cool under pressure.
It’s a brave buyer who makes a bid without certainty of finance. Having loan pre-approval in place lets you bid with confidence and sets a clear line for your upper bidding limit.
Be sure it’s what you want
When you find a place you like, ask for a copy of the sale contract from the agent—have your solicitor check it and read it yourself. Arrange for building and pest inspections or a strata report. Then decide on the maximum amount you’re willing to pay for the property.
Practice makes perfect
Attend a few other local property auctions to get a feel for how it all works. A good auctioneer can be a very effective salesman and you need to be able to look past the razzle dazzle and showmanship to simply focus on the bidding.
Bring a friend along
Taking a mate who has no connection to the property can help you keep a level head and remind you not to raise your hand if bidding goes past your buying budget.
Stick to your limit
When the auctioneer calls ‘the property is on the market’ it means the vendor’s reserve has been reached and the next highest bid will secure the sale. If that’s you, remember there is no cooling off period and you’re legally bound to exchange contracts and pay the deposit on the day. So set a bidding limit – and stick with it.
Have ID ready
Remember to take some personal ID plus your cheque book to the auction just in case you’re the winning bidder.
Be prepared to play it cool
Once bidding gets under way resist the urge to make an early bid – you could just be pushing the price up unnecessarily. Wait until the bidding starts to thin out before joining other active bidders.
Control your bids
You’re not obliged to bid in the increments suggested by the auctioneer. If you want to bid an extra $1,000 rather than $5,000 you have the right to call that.
For more auction rules and regulations, check out the fair trading or consumer affairs website for the state or territory you’re buying in: