It doesn’t get much more exciting than buying a home at an auction. But remember, auctions are fast-paced and it’s easy to get swept up in the atmosphere. So before jumping in head first, follow these three simple steps to secure a great investment in your future.
Once you’ve chosen your target area, it’s a good idea to spend some time researching the neighbourhood. Look for price trends and what other properties have recently sold for as well as what commercial or infrastructure developments might be on the cards.
While you’re at it, why not attend some local auctions as a spectator? Watching from the sidelines will show you what to expect – which should also help you to avoid first-time jitters when your big day comes.
So you’ve found a house you think could become your home, now’s the time to do a thorough inspection prior to auction. Walk through the property with a fine-tooth comb and picture how the layout will or won’t work for your way of life.
Make sure you get a building and pest inspection before auction day – so you don’t have any nasty surprises (such as structural issues) after you sign off on your winning bid.
Arranging for an independent valuation will help you decide what you’re willing to pay on auction day. This prep work could not only save you regrets, but a significant sum of money in the long run.
Speak to the real estate agent in the lead-up to auction day and ask as many questions as you can. They should be able to provide you with a condition report and a copy of the contract. Ask your solicitor to review this paperwork prior to auction day and tell you if any terms of sale strike them as red flags.
Finally, make sure the required deposit is on hand – if you are the highest bidder you must put down the deposit immediately after the auction. More often than not, this will typically be 10% of the purchase price.
Don’t forget to bring along some picture identification to register to bid, such as your driver’s license. If you registered in advance at your first inspection, you’ll still need to bring your ID on auction day.
Stay calm. Stick to your plan and your budget, and try not to let excitement get the better of you. There’s no cooling-off period with auctions, which means the winning bidder is obligated to follow through with the purchase – there’s no backing out afterwards.
So, here are some hints to help you bid like a pro:
If you still think your nerves might get the better of you, consider employing a professional to bid on your behalf. And remember, even though it’s exciting, this is still a major financial transaction – so be certain you’re comfortable with the price you’re willing to bid.