Auctions are like a circus, but with higher stakes and fewer hotdogs. When you’re a first-time buyer, the whole situation can be pretty overwhelming. But here are a few tips you can follow.
From where you stand and the clothes you wear to how you lift your hand, everyone’s got their secret trick to landing the winning bid.
So, we asked the experts for theirs. They have two clear rules: success at auction is about doing your research and sticking to your limit.
It’s a pressure-cooker environment. Everyone wants the keys to the property, but internally you’re having a competition just to be the winner, too.
It’s easy to get caught up in the emotional side – and that’s not always where we make our best decisions.
1. Take your pre-auction vitamins.
Going along as a spectator can help in getting you ready for the real thing. Take note of what people are wearing? Were they being supported by friends and family? Were they on the phone bidding on someone else’s behalf? This can assist in deciphering what separates the winners from the not-winners.
2. Do your homework.
Be sure to back up your practice runs with research. The reality is, with so many tools available, there’s no excuse not to do your own.
You can use online apps to track the current asking price/range and track the final selling price against this figure. After some time of following the ups and downs, you may have a pretty good idea of where sale prices are landing compared to their list prices.
3. Stay cool.
Think of your research as a kind of psychological training ground. The more information you have, the easier it will be to stay calm on the day – and that can be the difference between being the highest bidder and going home empty handed.
Your body language is important at auctIon. Use a firm, clear voice when you make bids. And bear in mind, you can dictate the size of your bid. If the auctioneer says he will take bids in increments of $1,000, calling a bid for $5,000 can show you are a serious buyer. Alternatively, bid in small increments to slow bidding down.
Keeping the heat out of it isn’t always easy, but it can help avoid overpaying – and regretting it later. Be smart and use your head not your emotions. Easier said than done.
4. Know what to expect – and what you’re buying.
Buying a house at auction is complex. Planning ahead will help you stick to your budget and make the right moves on the day.
Auctions come with a whole bunch of paperwork. Real estate agents will supply it on request, and reading it means you’ll know exactly what you’re buying and how.
It’s important to read the contract of sale and the Body Corp AGM minutes. This gives you information on the state of repair of the building or what might be planned for the future. Check out the area and planning permits that habe been submitted. Will these future plans inhibit your views or leave you with regret?
It’s always a good idea to have a pest and building inspection done before auction day to avoid any nasty surprises once the ink dries. Then, grab extra info like council rates, water rates and body corporate fees to make sure you know what you’re up for. And a good sanity check can’t hurt either.
5. Be clear about how much it all costs.
What about price? Settling on a limit is a combination of what you’re willing to pay, what the market says the place is worth, and how much finance you can secure. Be super clear on that figure before you head out, and make sure it includes all the extra home buying costs you may not have first thought of. Bidding at auction without a firm price ceiling is a recipe for disaster.
Having a conditional loan approval in place is a great way to know exactly what you can afford to bid, and that makes it a vital tool.
6. Bring in the professionals.
Even if you’re an actual real estate, it’s not your job to be amazing at auctions. It’s okay if they’re too daunting, or if you don’t feel confident making the winning bid.
There are people who can do it for you. If you’ve been doing your homework, you’ve probably already seen them at other auctions, talking to wannabe buyers on the phone. These buyers’ advocates can zap the emotion from your auction experience, so you can think with your head.
7. Don’t be afraid to walk away.
It can be hard to imagine right now, but this isn’t the only place you’ll want to buy. Just as you’ve moved on from your first car or your first good haircut, you will love again. If you miss out this time, breathe deeply, take a weekend off if you need to, and keep going.
Buying at auction seems intimidating – and it can be. Give yourself the best possible chance by doing the research, having a plan of attack, and getting your financing sorted ahead of time by contacting your Bloom Lending Broker. Then all that’s left to do is to pay your deposit and move on in.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.