Going to a property auction can be a gamble, but there are a few simple things you can do to help win your dream home.
Kick the tyres first
Inspect the property multiple times with the right specialists. Consider any required inspections – including building and pest – before you go to a property auction. Engage a solicitor or conveyancer to review the sale contract. Once you exchange contracts, there’s no turning back!
Check the rules
The rules for participating in auctions may differ across the States and Territories. You should check with your solicitor, conveyancer or real estate agent, if you are unsure of the rules that apply. In some States or Territories, you may need to register to bid at auction. Find out whether you need to take formal ID to bid.
Make sure your finances are in place
Make sure that your loan pre-approval is good to go. Don’t forget that pre-approvals only last for a certain period, so if you’ve been looking around for a while, make sure it’s still current. If you are the winning bidder, you may need to pay a deposit straight away. Find out whether this is the case and make sure that you have the funds available
Do your homework
Do in-depth research on the property’s market value and valuation expectations. Analyse the pros and cons of the property’s characteristics such as size, location, physical condition and proximity to amenities and compare to other similar properties that have recently sold. This important information can help you determine the price you’re willing to bid.
Get familiar with the auction process
Attend auctions where you are not planning to bid on the property, so that you can watch and learn how they work. Observe the processes and any strategies the winning bidder employs that seem effective. If you find the whole thing overwhelming, you may want to consider taking on a buyer’s agent or asking a family member to bid on your behalf.
Property auction day tips
Try to ensure you have direct line of sight to other bidders and the auctioneer. Get ready to pounce back with your bids quickly after a competing bid. Look the auctioneer in the eye, then announce your bid clearly and confidently. Try to stand by yourself and do not turn to your support crew for guidance.
These actions may give other bidders the impression that you have a lot of cash in your pocket, and may discourage them from bidding against you. Consider making your first bid close to around the reserve price. This indicates that you are serious about buying the property and moves the auction into a more realistic phase.
Set your limits
Doing so ensures that you bid in a strategic manner and with more confidence. This may help to reduce doubt as you submit your bids and prevent you getting emotionally competitive or over-extending. Be prepared to go to a figure like A$793,000 rather than A$790,000. This is a relatively small difference in the context of the overall price, but it can be enough to dissuade other bidders and help you win at the property auction.