Get Auction Ready With These 5 Tips
Property auctions can be a good way to buy your next home or investment property, provided you know what you’re doing. Unlike a private sale where buyers can add conditions to a contract – like finance or building inspection conditions – when it comes to auctions, buyers must do their due diligence before they bid. If you are planning to bid at an auction, you must be prepared. Check out these 5 tips to get auction-ready.
1. Do your homework
Research similar properties in the area and compare the selling price of those that have recently been sold to get a clearer picture of how much a property is likely to sell for. Moreover, you consider the current market conditions, including housing demand, time on the market, proximity to schools, CBD, and public transport, as well as property size and layout. All these factors should give you a clearer idea of how much the property will go for at auction.
2. Know what to expect
No doubt bidding at auction takes a bit of skill. To prepare yourself and understand auction proceedings, attend several auctions before you plan to bid. That way you’ll be familiar with the terms that auctioneers use, the style of different auctions, and how to bid. Pay careful attention to those who are bidding, the language they use, and the strategies they utilize. By the time you’re ready to bid, you’ll feel a lot more confident.
3. Get your finances in order
Property auctions are unconditional, requiring pre-approved finance and completed due diligence on the property before bidding. You will be required to pay 10 percent deposit on the day when your bid wins at the auction. It’s crucial you have pre-approved finance if you intend to bid at auction so you know how much you can bid up to and what your absolute bidding limit should be. It’s a good idea to set your bidding limit ahead of the auction – and then stick to it! – as it’s easy to let emotion rule your head in the heat of the moment!
4. Pre-register and read the terms and conditions
To bid on a property at auction, you need to register with the real estate agent and receive a bidder number. During registration, you must provide some form of ID like a driver’s license or passport. Additionally, you should check with the agent about payment of the deposit – how to make it and how much is required. Be sure to read and understand the terms and conditions of the auction, and ask questions if you’re unsure.
5. Bid confidently
It’s natural to feel nervous if you’re bidding at an auction for the first time – and even if you’ve bid at auctions in the past. But do your best not to let your nerves take over or to let your nerves show in your body language. Position yourself near the front of the auction room, if possible, with a good view of the auctioneer and other bidders. Use a strong, assertive voice to confidently call out your bid, and pay attention to those bidders around you. You may be able to pick up signals if they’re near to their bidding limit so that you push ahead to win.
When you’re ready…
Buying at auction can be exciting, but it can also feel intimidating. Set yourself up for success at auction by knowing how much you can afford and how high you can bid. Contact a Lending Connections broker today to arrange pre-approved finance and get ready to bid at auction.
Considering purchasing at auction?
To help, we’ve gathered a list of frequently asked questions from Harcourts’ top auctioneers. Download the guide here.