Live home auctions are exciting.
There are raised voices, flailing arms, and a bit of friendly competition. But if you’re not prepared, they can be over in a flash and you can leave outbid and empty-handed.
If you’re a property auction first-timer, you might not know the ins and outs of how to buy a house at auction. There are a few things to do before buying at auction to set yourself up for a successful sale.
Things To Do Before Buying At Auction
Get A Home Loan Pre-Approval
Be prepared with a home loan pre-approval before arriving at the property auction. This will help guide your bidding as you’ll already know your budget. Generally you’ll need to pay a deposit on the day if your bid is successful (there’s no cooling-off period), so having your finances in order is a must.
Complete All Property Inspections
Thoroughly inspect the property prior to auction day to avoid running into any issues down the track. If you’re serious about the property, be sure to obtain all legal, pest, and building inspection reports prior to auction.
Check Out Some Auctions Beforehand
It helps to get an idea of what you’re in for before the real thing. If you can, visit a few home auctions before the big day to see the process firsthand and pick up on the language and strategies bidders are using.
Research The Market
Inspect other properties in the area and find out what similar homes are selling for. It’s crucial to know the market and the value of the home you’re bidding on to determine a strict price limit.
Auction Tip: If you’ve got your heart set on a place, you can make an offer before the auction – but you may risk paying more than you need to.
Consider Hiring A Professional
Bidding at property auctions is a skill – that’s why professional buying agents exist! If you’re really not feeling confident about your first property auction, consider hiring an experienced buyer agent to bid on your behalf.
How To Buy A House At Auction
Register Yourself As A Bidder
You’ll generally have to provide your name, number, and address to participate in the auction. You may also need to show proof of ID, so be sure to have your passport or driver’s licence handy on the day. Once registered, you’ll be given a bidding number to show throughout the auction.
Keep Your Budget In Mind
It can be easy to get swept up in the excitement and begin bidding beyond your price range. Be sure to keep your budget and ‘walk-away’ price firm so you don’t risk biting off more than you can chew.
Auction Tip: Take a friend or family member with you for support, and tell them your strict maximum bidding price so they can help you stick to it.
Start Low And Go Slow
It’s not a race, and there’s nothing wrong with bidding in small increments. Bidding slowly can help you stay in control and on top of any nerves.
Call Out Your Offer In Full
When calling out your bid, be sure to state it in full (e.g. “$410,000” instead of just the increment “$10,000”).