Preparing to win at auction: Tips on how to get the best outcome
According to the latest statistics from REINZ, nearly a third of all homes were sold under the hammer in New Zealand during February. That’s a whopping increase of over 16% on the same time last year.
With more properties than ever being sold at auction, it pays to have a strategy prepared in advance. Here are our top tips to help you get the best outcome at auction.
1. Be auction ready
Once the hammer goes down, that's it! The property in its current condition is yours, and you have to pay a 10% deposit immediately.
To get auction ready, be clear about your approval status. Double-check the type of approval you have from your lender plus any conditions. And make sure you have funds available to pay the deposit on the day.
It pays to do your homework on the property well in advance. Get a building inspection done, study the LIM report and have a lawyer check over the sale and purchase agreement.
To get the best outcome and reduce your stress levels, you need to have all your ducks in a row before auction day.
2. Do your research
Be sure to analyse the local market. Find out the sale price of similar properties in the area to get an idea of your property's market value.
Practice makes perfect so go along to other auctions in the run-up to yours. Ideally, go to ones run by the same realtor or auctioneer. This will give you a good feel for how auctions work, the atmosphere and what's expected of bidders. And if possible, attend a mix of auctions, including on-site ones, as well as formal auction rooms.
Work out in advance what your budget is. Be clear about what you can comfortably afford. Consider having three figures in mind:
- the market value
- the price you are willing to pay
- your absolute top dollar.
3. Be confident and stay within your budget
Make sure you arrive nice and early. Auctions are stressful enough without the added pressure of trying to find a park at the last minute.
Position yourself where the auctioneer can clearly see you. Confidence is everything in an auction, so when making a bid, speak loudly and clearly. Try not to hesitate or consult with your partner before making your bids. Other bidders may interpret your hesitancy as you feeling the pressure or perhaps reaching your limit.
Don't be tempted to sway from the top-dollar figure you set in advance. In the heat of the moment, you can find yourself going beyond your limits to secure your dream home. However, exceeding your budget is never a good idea. Sometimes you will come across other bidders whose pockets are deeper, and there's nothing you can do about that. Hard though it may be to accept on the day, there are other dream homes – you just haven’t found them yet.
Auctions are high-pressure situations. The important thing is to have a firm plan in place and to stick with it. Use these tips to prepare in advance. That way, you can be cool, calm and collected on the day and give yourself the best possible chance of success.