| Tips to Buying at Auctions
Auction day is both exciting and stressful. It is a day when you really must be cool, calm & rational.
You need a well researched plan and set yourself a strict financial limit. If you can’t be unemotional, have somebody else or a good buyers agent to do the bidding for you.
What are you bidding on?
Before you go to an auction, be sure you know EXACTLY what you’re bidding on.
You need to do your homework and research:
- Get a building & pest inspection
- Research the neighbourhood
- Research comparative sales
- What have recent properties in that area sold for?
- Check the legal title information
There’s no cooling off period when you buy at auction, so you need to be 100% sure you know what you are buying. Pest, building, engineering and structural reports are absolutely crucial
Check the Sale Contract
Have your solicitor / conveyancer check the sale contract. They will find things that you may have missed or miss-understand. Make 100% sure you are fully aware of all the sale conditions.
Have your Finances Sorted
If you win at the auction – You have effectively bought the property. You will usually need to provide a 10% deposit on the spot. You need to have your loan all approved and ready.
The Auction Process
Attend a number of auctions before you participate in an auction. This will help you understand the processes and learn same valuable insights.
Be confidence and call out your bids with confidence.
Beware of under-quoting
Often agents will quote low ball prices to attract buyers to auction. This is unfortunately common – don’t get caught out by an unrealistic low price that turns into far more on auction day.
Stay within Your Financial Limits
Calculate what you are willing to spend – and unemotionally stick to that limit. If you exceed your limit you will probably be pay too much and end up struggling to meet mortgage repayments.
Don’t Give Too Much Information Away
Don’t tell the agent too much like the amount you’re willing to pay.
Counter-bid straight away – to always be in front. This idea of firing off bids with no hesitation confirms to the other bidders that the bid is nowhere near your limit (even if it is).
A Curve Ball to Buy Yourself some Time
If the auction is moving too fast for you, throw in a curve ball. Put in an uneven number bid like say $17,000 and say it as that, not $837,000. This may confuse other bidders & force them to stop & think, slowing the whole thing down a bit.