7 tips to ace your first auction
Buying your first house can be daunting and when buying through an auction, it can be a rollercoaster of emotions. Like anything, being prepared can help things go more smoothly and make sure the main emotion you are feeling is an excited confidence that things will go well.
1) First things first, get your pre-approval sorted
We know how it feels – you find a great place, and you just want to make it yours. But before you start launching into bids, it’s worth getting a clear picture of what you’re playing with.
2) Do your homework
The last thing you want when you’re buying a property is surprises. Do your best to arrange a viewing and make sure you get your hands on the building report well before the big day. The building report will let you know exactly what you are buying. If you are a low deposit buyer, it’s more than likely you will need to get a valuation, so ensure this is done before auction day. A valuation may impact how much the bank will allow you to pay for the property.
3) Allow plenty of time
Time is often short between open homes and auctions. It can be hard to get everything in order if you go to an open home on a Sunday, and the auction is the following Friday. When you see a property that is going to auction try to view it early and get prepared if you are keen to proceed.
Allow enough time for your lawyer to to review the property information pack, that is the Land Information Memorandum (LIM), the title, and EQC information, and review the terms of the sale and purchase agreement. It’s very important that your lawyer does this before the auction, as when the hammer falls, if you are the successful buyer, you can no longer back out of the purchase.
4) Know your limits
It’s easy to get a bit carried away in the heat of an auction so the smartest thing you can do is set yourself a concrete bidding ceiling before you arrive. Most likely this will be determined by the size of your loan pre-approval.
5) Get in the game – officially
Couple of tips here: be sure to ask if there are any changes to the contract while you’re registering on auction day; and consider having a friend or family member bid for you if you think the emotion might get the better of you.
6) Keep your cool as things heat up
This is it. The big moment. And as bids start getting thrown around, this is the time to take a few deep breaths and remind yourself of the game plan. Don’t play your hand too early and don’t get carried away and go over your limit.
7) Have your deposit handy
This is a biggy! Make sure you have your deposit sorted in advance because you aren’t winning an auction without it. A deposit is usually 10% of the purchase amount and is taken as a cheque, deposit bond or direct deposit. Ask the agent involved in the auction to see what the vendor’s preference is as banks aren’t open on the weekend and you don’t want to be caught out.
If you’d like to find out more, register for one of our first home buyers seminars or download our first home buyers guide here.