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Tips for buying a home at auction

Forget The Block, auctions are a lot less glamorous and much more stressful when you're the one holding the bidding paddle. If you are organised, have your home loan pre-approved, know what you are looking for and know your budget and won't go over it, then perhaps an auction could be the place you land your dream home or investment.

Here's some hot tips to help you prepare for an auction;

Before the auction

  • Finances. Have the funds ready to go by arranging pre-approval of your finances before the actual auction. That way if you win and you need to write a deposit cheque you will be armed and ready. Make sure you get pre-approval at least two to four weeks before the auction.
  • Compare home loans online. Your home loan will determine how much you ultimately pay on a home. Don't let bad interest rates override any savings you made on auction day. Shop around for the best home loan prior to the auction by comparing some of Australia's best home loans
  • Experience. Practice makes perfect. Attend a few auctions before you go to your own so that you understand how they work and look at bidding strategies people adopt.
  • Set yourself a limit. This isn't a shoe sale where one can get a little carried away. You are buying a home so remember that. Try not to get too emotionally attached and always remember your limit. To get an idea of what price the vendor may have in mind, do you research and look at the prices of property for sale in the area you are considering.
  • Changes to contract. If you require any amendments to the contract, make sure you speak to the estate agent beforehand and ask for this in writing. That way if you win the bidding everything is clear and straightforward and both parties are ready.

On auction day

  • Arrive early. Eagerness often gets rewarded. Biddings can be intense so getting there early, finding a good spot and giving yourself plenty of time will make the whole experience less so.
  • Start low. Don’t peak too soon. It's easy to get carried away but it's much better financially if you start off controlled and start the bidding low. You need to have somewhere to go after all.
  • Confidence. Act like you know what you are doing, even if you don't. When bidding, say it fast and try not to hesitate as sometimes this can appear as a sign of weakness and panic to the other bidders. Also try to remain unemotional as this could be used against you.

Finally if you are outbid, keep trying as it could mean there is something better around the corner. Buying a home at auction can be fun and exhilarating so get in on the action if you are in the market for a new home.

Check out today's home loan deals by using the RateCity home loan comparison tool. Want to work out your repayments? Use the home loan repayment calculator.

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