If you’re in the market to buy this summer, chances are you will see many properties going to auction – but don’t let that scare you off.
The prospect of purchasing at auction needn’t be daunting, so long as you’ve done your research and you are well prepared.
Start by attending property inspections and auctions in the area in which you are looking to buy. Online data research will only get you so far. It is important to find out what properties in the area are selling for and what techniques buyers are using to secure the best outcome on auction day.
Next, get your finance organised by insuring you have a loan pre-approval. This will demonstrate to the vendor that you are committed to – and prepared for – the purchase. Pre-approval will also allow you to set yourself a spending limit. It is easy to become caught up in the excitement of an auction, so developing a budget and sticking to your upper limit is essential.
It may be a good idea to nominate a buyer’s agent to bid on your behalf if you have become particularly attached to the property and think you might get overly emotional at the auction. Once given an upper limit, the agent won’t go over it. A buyer’s agent is well worth their fee since they can also give you advice on the value of the property and provide added insight into the area that you might not have uncovered during your research.
Remember that if you are the winning bidder at an auction, you are required to hand over a deposit to the vendor on the spot – this includes in cases when the property is passed in and you negotiate successfully with the vendor. Make sure you visit the property prior to auction and inspect it thoroughly. Building and pest inspections should be completed before auction day since this will ensure there are no hidden surprises that end up costing you heaps down the track.
Finally, remember to treat an auction like a business deal – leave emotion out of it. New properties are put on the market every day, so if you aren’t successful first time around look at it as a practice run and prepare yourself for the next property.
