8 tips to become an auction expert
07 November 2016
With the spring home selling season now upon us, we’ve got some great tips to help you become a bidding expert at your next auction.
1. Get organised!
Make sure your finance has been approved prior to auction day, as this ensures you have the money for the purchase, and will allow you to set a price limit and bid confidently. There is no cooling off period when buying at auction, so if you win the bid, there’s no backing out.
2. Know what happens if your bid wins
When buying at auction, you will be expected to sign the contract and pay the deposit (typically 10%) as soon as the auction concludes. The deposit can be paid with a personal cheque, bank cheque or cash.
3. Get advice
If you are seriously considering a property, have your solicitor or conveyancer inspect the ‘Agreement for Sale’ document. This will give you assurance that everything is in order and you have a clear understanding of the conditions of sale. Conduct professional building and pest inspections prior to the auction, so there are no nasty surprises if you purchase the property.
4. Play your cards close to your chest
The real estate agent represents the seller, not the buyer, so will try to pry information from you, especially on how much you’re prepared to pay for the property. Don’t reveal information that might be detrimental to your negotiating power.
5. Clear your Saturday schedule
It’s a good idea to attend plenty of auctions to familiarise yourself with the formalities and observe different bidding strategies. It may sound stalker-y, but it’s also smart to watch the auctioneer who is selling the property you are interested in to learn their techniques.
6. Get in front
Position yourself somewhere prominent and noticeable at the auction. Stand where you can see what’s going on, and more importantly, where the auctioneer can clearly see and hear you when you’re bidding. This will limit the possibility of being misinterpreted.
7. Keep your cool
Auctions can be daunting whether you’re buying your first home or an investment property. If you don’t feel confident bidding, use a proxy bidder. You can hire a professional purchasing agent or use a family member or friend. The proxy bidder will need to provide a letter of authority from you, authorising them to bid on your behalf.
8. Be patient
Be prepared to miss out. You have done your homework, know what the property is worth to you and how much you can afford – so stick to your price limit. If you miss a property at auction, look forward to finding something better soon.