Whether you are a first-time buyer, a property veteran or just looking for your next step in the market, purchasing at auction can be an exhilarating or a daunting ride.
Loan Market’s State Director Tim Amorous shares his seven tips to making the process as smooth and successful as possible:
“We know how it feels – you find a great place and you just want to make it yours. But before you start launching into bids, it’s worth getting a clear picture of what you’re playing with,” Mr Amorous said.
Go in with your eyes open
“The last thing you want when you’re buying a property is surprises. So, it’s really important to get your eyes over the building and pest reports well before the big day.
“Once you’ve made the winning bid, you’re expected to sign it there and then, so it’s important to do your ground work ahead of time. Keep an eye out for any special conditions or easements.
Know your limits
“It’s so easy to get a bit carried away in the heat of an auction, so the smartest thing you can do is set yourself a concrete bidding ceiling before you arrive. Sometimes sending someone to bid on your behalf who knows your limit is a clever tactic.
Officially get in the game
“You can’t just turn up and start bidding. In NSW, QLD and Victoria, if you’re planning on raising your paddle, you’ve got to register to bid – before or on the auction day – with some I.D to prove you’re you. If someone is bidding on your behalf, they’ll need written authorisation.
Keep your cool
“Make sure you keep your head in the moment. As bids start getting thrown around, this is the time to take a few deep breaths and remind yourself of your game plan.
Be deposit ready
“Make sure your deposit is sorted in advance, because you aren’t winning an auction without it. A deposit is usually 10% of the purchase amount and is taken as a cheque or electronic bank deposit. Remember that banks aren’t open on the weekend and if you’re transferring via internet banking, you may have a transfer limit.”
Mr Amorous said auctions were a great way to buy and no matter what stage you are on the property ladder, buying under the hammer should be a real consideration.
“There’s no doubt that an auction is a great way to buy, it’s transparent and you know exactly who you’re up against on the day. Keep in mind if you have pre-approval of an amount to bid for, you can approach the vendor for a pre-auction offer,” he said.
Ray White’s Principal Auctioneer Adelaide Brett Pilgrim said the key on auction day was to have a solid plan in place and to focus on yourself.
“I see a lot of people wait and watch what others do and they just end up mirroring whatever the other person does,” Mr Pilgrim said.
This can result in you not getting the home because you doubted your own thoughts and stepped back or you paid more than you wanted because the ‘small bids’ just kept going.
“It’s for these reasons you need to have a plan in place and don’t worry about others. Bid with confidence and keep the bids reasonable because if you reduce your increments, you may encourage others to keep going.
“Make sure you set yourself a maximum based on what you’re happy to pay, and stop there.”