Buying a house at an auction can be stressful and daunting. Because of the way an auction process works, the pressure and stress can be overwhelming, even for experienced buyers.
Here are some tips to help you get ready for auction day.
Do your research
There is no substitute for research. Get to know what the property market is doing in the area that you are looking. Talk to the local real estate agents and mortgage brokers. Get a feel for what the prices are for the properties you are interested in. A good tip is to look at the last six months price results.
Attend lots of auctions
Familiarise yourself with how the auction process works by attending as many as possible. Talk to a few real estate agents beforehand and ask them lots of questions about how they work, what are the processes and regulations around auctions.
It is essential to attend as many auctions as possible to get a feel for the process. Knowing how to make a bid during the auction and what happens next will give you confidence.
Take note of any winning strategies from bidders, and what starting price was in relation to the winning bid.
Inspect the property properly
Once you have found a property you may buy, make sure you organise pest and building inspections
As well as physically inspecting the property yourself, ask the seller for copies of any building inspection reports that may have been prepared. If none have been done, organise pest and building inspections before the auction date.
Try to view the property several times. Get a feel for the street and neighborhood. And make sure any inspections are completed before the auction. You may only get one chance at this, so you have to make it count.
Check the Contract of Sale
Get a copy of the Contract of Sale from the vendor’s agent and have this checked by your own solicitor/conveyancer. Have your legal experts inspect the contract before bidding and know exactly what is included in the sale.
If you are the winning bid on the day, you must sign the Contract of Sale. With auctions there is no ‘cooling off period’ when purchasing.
Get your finance organised
Make sure you have your finances in place by auction day. This includes the 10% deposit you will have to pay if you are the successful buyer.
You will be entering into a binding contract once you place a winning bid. Make sure that you have your finances in place. Talk to us if you have any questions about setting up a pre-approval before auction.
Making your bids
Set your upper price limits before the auction begins. If you set a limit, you will avoid getting in over your head financially.
Try to approach the auction process like a business transation. Keep a cool head and a calm manner. This will maximise your chances of making the right decisions during the auction process.
Contact us if you want to find out more about how we can help with your finance options.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.