Bidding at an Auction
Auctions. They can be extremely daunting, especially when you’ve never been to one before, let alone placed a bid at one! However, if you go in prepared, they can be a great way to secure a brilliant home in a competitive market. Here’s our top 3 tips for buying at auction!
- Do your research!
Researching the property itself is a must, but it’s also worth researching the laws and regulations for auctions in your location. There are two things to remember at auction, firstly you will be signing an unconditional contract (we’ll cover special conditions to an auction contract in a different post) which means there is no finance clause, no building inspection clause, no pest inspection clause, etc. Secondly, in New South Wales, the usual 5-day cooling-off period does NOT apply when purchasing at auction.
So what does this mean? Well, you need to be confident of your financial situation (preferably having obtained pre-approval from your lender, see this blog here). You also need to have conducted any pre-purchase inspections that you want to have done before the auction. As you don’t know if you will be the winning bidder at auction, the money you pay for these inspections may feel “wasted”, but unfortunately that’s just a decision you have to make when considering a property being offered for auction.
It’s essential that you understand the rules of an auction, it’s conduct and also have an idea on what your bidding strategy will be. Spend some time researching on the internet about auction rules in your state and strategies in general, to ensure you go into the auction as prepared as possible.
- Decide upon your maximum price before you arrive.
Auctions are quite exciting and it can be all too easy to get caught up in a heated bidding war. This is why it’s imperative to have had a good think about your maximum price before you get to the auction.
Give yourself the time to thoroughly consider what you think the property is worth and how well it suits your needs to determine your maximum buy price. Going into an auction with this in mind will help you avoid a situation of over-paying for a property or busting your budget!
- Cool, calm and collected
While it may be a hard task, try to remain calm, clear and confident during the auction. Listen properly to the auctioneer and other bidders, and take your time when placing a bid, speak clearly and loudly. The auctioneer will announce loudly that the property is “on the market” when the reserve price has been reached. They will also be clear when the latest bid is going to be accepted, “Going once, going twice, SOLD!”.
When it’s all said and done…
We hope these tips are beneficial in helping you prepare for your next auction. Our agents are more than happy to speak with you about the auction process, a buyer’s guide and any other auction questions you may have. Even if you’re not the successful bidder at the end, remember that another property is just around the corner (pun intended)! Plus you’ll be more experienced and prepared with how it will run. Happy bidding!
- How do I bid at an auction?
- Auction rules
- Bidding at auction
- Auction process