5 Key Tips To Successfully Buying At Auction

5 Key Tips To Successfully Buying At Auction

By Ellen Blundy | June 2023

5 Key Tips To Successfully Buying At Auction

There’s excitement in the air, the crowd gathers, the auctioneer starts their introduction and announces the property is for sale and will be sold. Suddenly, it’s on… but how can you ensure you’re successful in securing the property you want at auction? It all comes down to research, pre-planning, and a little luck.

Our team at Peake have compiled a list of 5 Key Tips to Successfully Buying at Auction. Our team know and love the auction market in our community having held many auctions over the years.

Tips For Successfully Buying A Property At An Auction

1. Do your research to understand the local market. When you get a proper sense of the existing real estate market in the area you wish to purchase, it can be a big help come auction day. Some important steps to follow are:

• Attend some other auctions to get the overall feel of what happens on auction day and observe some of the different auctioneers in the area to see how they operate as each operates a little bit differently.
• Check out what type of buyers homes in the area are attracting and which real estate agents are standing out for you. You’ll also get to look through some of the properties in the area and see how they compare to the one you’re interested in purchasing.
• Set proper alerts on properties, real estate agents, or auction times to receive instant notification about potential listings.

Stay up to date on real estate news in your area. Get on the list at leading real estate agency sites to stay updated. Read the local paper for different auction results and property sales at an auction.

• Build a relationship with experienced local real estate agents. Talk to leading agents about the auction market, what they’re seeing happening and what they predict will happen in the near future.

2.  Get in-depth information about the property. When a property comes onto the market which sparks your interest, get to know that property extremely well.

• Research the history of the property, any renovations or extensions which have been added along the way, the last sale price and timing, and any information you can find online.
• Talk with the listing agent and ask as many questions as you like. At the open home inspect the property in detail.
• Write out a pros and cons list of buying the property and assess whether this is the property for you and your property goals.

 

3. Prepare your finances and conduct due diligence. There’s no point turning up on auction day if you don’t understand where you stand financially. Talk with your personal mortgage broker or a bank to understand your borrowing capacity and get all your ducks in a row!

• Try to obtain pre-approval for a certain loan amount so you have an idea of what a lender is willing to lend you.
• Attend the auction with confidence and clarity, knowing how much you can spend (and know your limit well).
• Undertake the relevant building and pest inspections to ensure you’re aware of any potential issues with the property and you won’t be caught out by any big surprises.

 

4. Have a strategy and stick to it. Irrespective of the strategy you use come auction day – whether you bid late or early, in larger or smaller increments, or use a trusted friend or buyer’s agent to bid on your behalf – the crucial part is that you have a strategy. Know what you want to do in advance, and how much you can bid. Try to stick as close to the budget as possible, especially if you’ve been pre-approved for a certain amount. While you may fall in love with a property or let emotions or competitiveness take over auction day, it could result in you committing to a price out of your budget.

 

5. Understand the rules. The Auctioneer will outline the rules of the auction as they begin the auction. Listen carefully and understand what you can and cannot do. For example, you cannot give a bid after the hammer falls. There’s no cooling-off period during auctions! So, review the contract before and after the auction to ensure there are no legal issues. If you win the bid, you’ll be required to sign the contract immediately, ensuring you’ve read the contract and understand its conditions very well. If you want to ask questions about how the auction will be run, ask the listing agent or their team before the auction.

 

BONUS TIP: If you are outbid at auction and don’t walk away with the property you desire the first time, don’t be discouraged! Winning at auction can take a few attempts and your perfect property will present itself. Talk with the listing agents about similar properties on the market or properties they know are coming soon to the market and keep up to date on auction times. The more auctions you attend the easier and less stressful it will become. Auction day is exciting and fun, it can be a memorable day “winning” your property. We can’t guarantee another bidder won’t outbid you come auction day, however if you follow the tips, we’ve outlined then you’ll be in a great position to secure the property you want!

 

Speak with our team at Peake and understand which properties are coming up for auction. Get in touch with us today on 9707 5300.

 

Good luck!