Attend plenty of auctions before you bid
Before your bidding debut, it’s important to observe several auctions to understand how they work. Get a feel for the language used and the process involved.
In general, here’s what you might expect:
Make sure your finance is in order
As the auction heats up, it can be easy to get caught up in the excitement and bid more than you intended. For this reason, it’s extremely important to have your finance pre-approved before you don your auction hat.
Home loan pre-approval is a written indication from a bank of the amount they are willing to lend to you. Pre-approval gives you a clear understanding of your spending limit and greater confidence when bidding. Speak to us and we’ll sort out pre-approval for you.
Also, don’t forget to plan for how you will pay the deposit on the day. Check with the selling agent which payment options are accepted in advance (personal cheques, bank cheques and deposit bonds are commonly used).
Get building and pest inspections
Be sure to have building and pest inspections performed before the auction. There’s no cooling off period when you buy at auction, so if you’re the winning bidder, you are obliged to purchase the property. You don’t want any nasty surprises once the property is yours.
It’s vital you go into the auction with a bidding strategy in mind. One common tactic is to knock out the competition with a strong bid early in the game. For example, if the bidding is hovering around $520,000, you may come in with a confident bid of $600,000. This shows other bidders you have the money and are prepared to buy.
Other approaches include starting low and early and progressing with slow bids, or avoiding hesitation and counter-bidding straight away. Whatever your strategy, be sure to call out your bids loudly and with confidence.
Call in back up
You don’t have to go it alone. If you’re concerned about staying within budget, you could ask a friend or relative to support you on the day to help keep you accountable. Another option is to have a professional bid on your behalf. Ask us for a referral.
Auctions are stressful, but with a little preparation you’ll be able to navigate your first auction like a pro. For advice about your borrowing power, deposit, pre-approval and home loan options, please get in touch. We’re here to help!