With some states now giving the thumbs up for in-person auctions it’s a good time to check out our auction preparation tips.
The auction atmosphere can be overwhelming for people who are new to the experience and losing out on a home you’ve fallen in love with can leave you feeling very disappointed and unmotivated, so it's important to be prepared.
1.Prepare before the big day
From the moment you start property hunting, you should be doing your research and arming yourself with knowledge of the local market. Find out what comparable properties have been selling for, attend multiple open for inspections, and have an understanding of how much stock is for sale.
2. Know your limit
Chat to your local Mortgage Choice broker who can help you receive conditional pre-approval for a home loan. This is an indication from a lender that they are willing to lend to you and it will tell you exactly how much you’re able to borrow.
3. Avoid overbidding
It's easy to get caught up in the auction atmosphere and ultimately go over your limit. But, bidding more than you can afford puts you in a tight spot when it comes time to secure financing- you don’t want to overextend yourself and then realise afterwards that you can’t afford the monthly repayments. As such, it is important for you to have a limit and stick to it, no matter the outcome. By having a limit you will also bid confidently and know when it is time to stop bidding.
4. Have your ducks lined up
In addition to getting a pre-approval for a home loan, there are other elements you need to consider. At an auction, there is no cooling off period so you will be required to pay the deposit on the same day and there will be no opportunity to carry out pest and building inspections. Therefore, before you think about bidding, employ a conveyancer to look over the contract of sale and if necessary, have the necessary inspections carried out. You do not want to purchase a home only to realise it comes with major problems which can cost you dearly down the track. In addition, make sure your finances are in order on the day of the auction.
5. Keep your emotions in check
Buying a property is highly emotional, especially at auctions when everything is on the line. An auctioneer knows this very well and will try to spur you to throw in extra bids to secure a home. Resist the urge if you have already hit your limit. Remember to breathe and stay calm throughout the experience and accept that you may have to walk away empty handed. There will always be another property.