Auctions are fast gaining traction as the most popular way to sell a property in Australia. Auctions can be fun, exciting, and present an opportunity to snap up a bargain. For sellers, an auction is a great way to drum up as much interest as possible (and hopefully the best possible price.)
For all the glitz, glamour, and action, an auction is not for first-timers. It can be downright intimidating to bid on a property at auction, and there’s more to winning your dream home than finding the best lender in Australia.
What happens if you find the property of your dreams up for auction? Follow these tips, and you’ll be an auction old hand in no time.
Be prepared.
A great tool for anyone looking to enter the property market is home loan preapproval. Home loan pre-approval is essentially a document drafted up by your lender that defines how much you can borrow based on your financial situation. Pre-approval is a great way of knowing exactly how much you can spend and arms you with instant finance if need be.
Test the waters.
A little bit of knowledge goes a long way, this rings true when bidding on a home at an auction. Before you try and win the home of your dreams, visit some auctions. Watch how people are talking, the language used, and actions performed. Talk to the auctioneers, talk to agents. The more you surround your self in auctions, the less intimidating they become and the more confidence you gain
Compare.
Why is this property selling for the price it is? What are sellers asking for houses in the same area? The selling agent should be able to provide an insight into the asking price, so don’t be afraid to quiz them on surrounding properties. Knowing the market will better prepare you when it comes time to make a confident, informed bid.
If you are considering renovating or making improvements, ask the agent about similar works performed on surrounding properties. Some properties will have limited scope for improvements, so always ask first.
Keep your cards close to your chest.
Hopefully, you have been given pre-approval for your home loan, so you will already know your upper limit. Doing your research and informing yourself will arm you with all the necessary tools and insight you will need to win come auction day. You know all of this information, but the selling agent doesn’t need to. Keep your cards close to your chest, and don’t give to much information away.
Go slow and low.
Start the bidding low, to warm up into the higher numbers without feeling the nerves. Starting your bid low gives you the confidence to bid without jumping straight into deeper waters, and it sets the pace for the auction. Pace yourself, go slow and enjoy the process.
Don’t get carried away.
You already know your limit so stick with it. The excitement of Auctions is designed to erode sensible decision making so stick to your guns and don’t get disheartened if the asking prices rockets away from your set limit.
Buying a property at auction is a once in a lifetime experience, but it can be hard for a beginner to bid intelligently. Finding the right lender and the perfect home loan package is only half the battle. Gain some experience before bidding for your dream home, and always stick to your limit. It’s easy to get carried away on auction day so keep a cool head and have fun with it. Happy hunting and good luck on the big day!