Preparing to buy at auction.
With Australia’s property market running red hot over the past couple of years, auctions have become an increasingly popular sales method.
But what’s involved with buying at auction and what should you do in advance of the big bidding day? Here are our top tips for buying a property at auction…
Do your homework
Buying a property means doing your homework, and that’s particularly the case when it comes to buying at auction.
If a property piques your interest, do your research well in advance of auction day, including organising pest and building inspections, researching the area, checking on any zoning restrictions, and looking at similar homes that are for sale in that street or suburb.
Each of these helps determine how the property compares to others, what it’s likely to be worth, and allows you to consider how much you’d be willing to pay.
Get your finances in order
If you’re the successful bidder when the auction hammer falls, the sale is unconditional. That means you need to have your finances in order and be ready to proceed with the purchase.
Long before you attend an auction and make a bid on a property, ensure you’ve spoken with your lending institution and have pre-approved finance in place.
This helps you also understand the maximum you can afford to pay for the property. And don’t forget, once the hammer falls, a deposit is required.
Typically, that deposit is around 10 per cent of the property’s final auction price, so you will need those funds at your disposal.
Know your limits
Auctions can move at a fast pace. They can also be exciting, but it’s important to be clear about your financial limit and not get carried away in the moment.
If you have a budget that you can’t exceed, be clear on it and stick to it. If you’re worried you might get too caught up in the excitement or find the stress of bidding slightly overwhelming, it might be worth having someone you trust, such as a family member, friend or professional, bid on your behalf.
Understand the auction process
If you’re keen on a house that’s for sale by auction, take the time to attend other property auctions in advance so you understand the process.
Attending other auctions allows you to see the bidding strategies people use and consider what might work for you.
It also gives you a good feel for the dynamics that are involved.
Calm, confident and strategic
Buying at auction is all about confidence. It’s about knowing you’ve done your homework, being clear on your limit, and having a plan in place for how you want to bid on auction day.
With each of these boxes ticked, the auction process then involves calmly bidding in the hope it’s enough to secure the property you want.
How we can help
If you’re considering buying or selling a property, why not chat with one of our friendly agents to understand the state of play in your local market?
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