Are you getting ready to step into the fast-paced world of property auctions in Australia? Whether you're a first home buyer or a seasoned homeowner, the competitive nature of auctions can be daunting for many. Understanding the auction process can be the key to unlocking a dream property. In this insider's guide, find our 10 top tips to help you navigate the auction landscape with confidence.
1. Do your homework
When it comes to property auctions, knowledge is power. Research the local market, understand recent sales in the area, and familiarise yourself with property values. This important groundwork will help you determine a realistic budget and identify potential bargains.
2. Set a realistic budget
Before bidding at an auction, it's important you establish a clear financial plan to ensure you bid within your means. Set a realistic budget that considers not just the maximum property price you can afford, but also the additional costs like stamp duty, legal fees and moving costs.
3. Get pre-approval
Property sales by auction are unconditional, so it’s essential home buyers secure finance pre-approval from a lender before bidding at auction. Not only will pre-approval ensure you bid with confidence, but it also helps you set a firm budget based on your lender’s assessment.
4. Attend auctions as an observer first
If you're new to the auction scene, attending a few auctions as an observer could help you to understand the dynamics. Watch the auctioneer and other bidders to get a feel for bidding strategies, pacing, and the auctioneer's style. This first-hand experience will help you feel more comfortable when it's your turn to bid.
5. Set a bidding strategy
Don't let the excitement of the auction room catch you off guard. Instead, have a clear bidding strategy in mind. Whether you start with a high bid to knock out the low bidders, or make smaller, incremental bids to gauge the competition, determine your maximum bid and then stick to it.
6. Stay calm under pressure
Property auctions can be fast-paced and intense, but it's crucial you stay calm and composed. Set your emotions aside and don’t get caught up in the heat of the moment. Having this mindset will help you make informed decisions and bid strategically.
7. Understand the terms and conditions
Before the auction day, familiarise yourself with the terms and conditions of the sale, including deposit requirements and settlement timelines. Have your solicitor or conveyancer go over the contracts to identify any legal issues. Being well-informed will prevent any surprises further down the line.
8. Do your due diligence
If you're serious about bidding on a property at auction, it’s important you arrange building and pest inspections before auction day. Once the hammer falls at auction, the sale is unconditional so having these reports ahead of the day will ensure you’re clear on how much you might need to spend on repairs. And, if the inspections uncover any serious concerns, you may decide not to bid at all.
9. Attend property inspections
Don't just rely on online listings but make sure you attend property inspections too. Visiting the property in-person and having a first-hand look at the condition of the property could help you decide on your bidding strategy and help you get clear on the true value of the home.
10. Be prepared to walk away
Finally, know when to walk away. If bidding surpasses your budget or the property doesn't meet your expectations, resist the temptation to overextend yourself. There will be other opportunities in the market.
Get the property of your dreams
Auctions have become an increasingly popular way to buy and sell property in Australia. For home buyers, auctions offer certainty, a transparent process, and the potential to secure a property for a price you’re prepared to pay.
For those who are new to the process, buying property at auction can appear daunting, so it helps to be prepared. Get advice about securing mortgage finance or mortgage pre-approval to help you prepare to bid at auction by contacting a Mortgage Express broker today
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
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