Aside from the usual method, you can purchase a property through an auction. Depending on where you are, auctions could be the more dominant way of purchasing of property. What should you do to ace an auction? Here are some tips:
Pre-approve your home loan.
Before anything else, secure your financing. You can do this by having your home loan pre-approved. This will set your budget and also expedite the process of purchasing a home.
Study how auctions work.
If you think that bidding at auctions can be easy, think again. Before buying a home through an auction, first look into how auctions work. Go to auctions and see how things work. Observe what people do and how they talk. You can also ask auctioneers and agents for more information. Having some knowledge beforehand will ensure that you know what you’re doing and that your interests are protected.
Consider getting the help of a buyer’s agent.
A buyer’s agent can guide you throughout the auction process—even in bidding! Having someone to assist you through everything and answer your questions can help you make better decisions and find the right home for you.
Prepare your arsenal before the auction.
It’s before the auction, here are some other important tasks for you:
Do market research (ask your agent for help!).
Inspect the property to make sure that it’s in order.
Conduct a title and land tax clearance search.
Get a property valuation to confirm that the property is within your budget.
Get a copy of the contract.
Seek advice from a conveyancer about terms and conditions in case you win the bidding and if there are some things in the contract you don’t understand.
Aside from these, ask the selling agent about the following:
The amount of deposit they will ask for
The payment method
Past comparable sales in the area for proof that the property should sell at its asking price.
Ask if anyone renovated in block. If you want to renovate the property, this will give you idea on what to do and not to do.
Keep your cards close to your chest.
While selling agents will be willing to help you, remember that they will put the seller’s interests first. Because of this, don’t divulge specifics on what you will do on the bidding or the amount you’re willing to pay for the property.
Start early and low.
Start bidding as early and as low as possible to be more in control of the situation. If you bid late and wait until the property goes on the market, you can get frazzled and might lose the bidding.
Just take your time and go with the flow. Drawing it out can actually yield a better price for you, as the pressure can urge the seller to lower their reserve price.
Have some confidence.
Keep your head high and state your bids with confidence. Call out your bids in the whole amount rather than just repeating the increments the auctioneer is saying.
Set a limit.
Set a limit and stick with it. Your final limit should be the amount going to be loaned to you and your deposit. Decide a threshold for the property as well. A good rule of thumb is basing it on the property’s valuation range. If the bidding price is going outside your limit, it’s time to find another property.
Auctions can be exciting, just remember to relax and prepare for it. Good luck on your bidding! If you need more auction advice, don’t hesitate to contact me.
BEN WAKELY | 0405 000 219
Bardon Agent of the Year