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 are 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 beforehand: Your home loan will determine how much you ultimately pay on a home. Don’t let bad interest rates override any savings you might make 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 to help 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. Remember that you're buying a home, so 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 can get rewarded. Biddings can be intense, so getting there early, finding a good spot and giving yourself plenty of time could make the whole experience less so.
- Start low: Don’t peak too soon. It’s easy to get carried away, but it can be better financially if you start off controlled and start the bidding low. You need to have somewhere to go after all.
- Confidence: It can be worthwhile to 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 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.