TOP AUCTION TECHNIQUES
Buying a home at auction can cut your purchase price dramatically. But many beginners fail to realize how these auctions work. To maximize your chance of success, you need to understand the auction process.
The Auction Process
Always do your research before the auction. Know what the house is worth in good condition, know what it needs, and figure out your budget before you start. Above all, do not get swept up in the excitement of the moment. Keep a cool head and stick to your plan.
Pest and building inspections should always be carried out before the auction. The inspection will expose any structural issues or other problems that will affect the value of the house. Surprises are common after a property auction. Avoid them with an inspection.
If you’re the high bidder, you’ll need to put down a deposit immediately after the auction. Unless you’ve negotiated otherwise, this is typically 10 percent of the purchase price. You can eliminate any problems during this phase by getting pre-approved for a mortgage. (A mortgage consultant can help you with the pre-approval process.) Also remember to bring a picture ID and register with the auction when you arrive.
Once they begin, property auctions move quickly. They can be intimidating. Consider legally appointing someone to bid for you if you’re not comfortable with the pressure and bidding practices.
Key Tips for Buying At Auction
Auctions can be overwhelming for first-time buyers, but these tips can improve your chance of success:
• Study the market values in the area surrounding the property. Knowing current prices in the neighbourhood could keep you from overpaying, or it could reveal a hidden gem.
• Stay calm and stick to a pre-agreed bidding limit. You’ll avoid bidding too high, and you’ll appear calm and confident before other bidders.
• Attend a few auctions before you bid on a property. Familiarise yourself with the atmosphere and process so you’re comfortable when it comes time to bid.
• Enlist the support of your family and friends on auction day to keep you calm and focussed.
• Even if you don’t win your property, stay positive – there are plenty more opportunities out there.
• Talk to a mortgage consultant beforehand. They know a lot about home valuations and the buying process.