Buying a property at auction can be daunting and stressful, particularly for those that have never bid at auction before.
And with a significant amount of properties being “auctioned” throughout this Spring and Summer it’s critical to have a good understanding of how auctions work, how to prepare and how to bid before you attend.
1. Work out what the property's worth and what you're prepared to pay.
Research recent sales, talk to agents, explore the neighbourhood and speak to neighbours. This simple strategy will help you get a feel for what you might have to pay to secure the property at auction.
2. Get to know the selling agent.
Attend other auctions and study the style and technique of the selling agent. Take note of how people bid and notice when the property is "on the market" to be sold.
3. Have the property and the documentation thoroughly checked prior to the day of the auction.
Arrange to have the property inspected by a qualified building and pest inspector. Ask for a copy of the Section 32 documentation for the property so that you (or your solicitor) can check that everything is in order prior to auction.
4. Don't be afraid to ask for help.
If you're unsure about bidding at auction get someone else (who you trust and has experience) to bid on your behalf.
5. Negotiate terms before the auction.
You may be able to negotiate the settlement period or deposit with the vendor prior to auction. This strategy may also help you gauge the level of interest in the property before you bid. For example - if the vendor is willing to negotiate terms it may suggest that the level of interest in the property is low, on the other hand if the vendor isn't willing to negotiate terms it may indicate that they feel the level of interest in the property is strong.
6. If you love the property don’t wait – make an offer prior auction.
Auction campaigns generally have a “set auction date” with the entire campaign running for a period of around 4 weeks. At any stage throughout the auction campaign the vendor (seller) has the right to sell their property prior to auction without notice. Therefore to avoid disappointment, make your intentions clear to the selling agent, express your interest early or perhaps test the market by submitting an offer prior to auction.
You never know – they may say yes!