Bidding at an auction is up there with one of the most stressful, or exciting things you can do. Vendors and agents opt for sale by auction because they believe it gives them an advantage.
People can be overtaken by emotion in the moment, pushing them beyond their limits, or they get caught up in the competition and want to outbid other buyers.
It can be difficult to maintain your calm under such intense pressure. So we have compiled some top tips to help you prepare for the best auction outcome.
- Know the value of the property
Make sure you do your research before going to auction. Ignore the auction price guide set down by the agent and work out what you think the property is worth based on recent sales in the area. Do your research.
- Set your limit before you go to auction
One of the biggest mistakes you can make is getting caught up in the moment and going over the limit you have set yourself. Remember, you set that limit for a reason – either that’s all you believe the property to be worth, or that is the top of your budget without causing financial stress.
- Attend numerous auctions beforehand
The first auction you attend shouldn’t be the one you’re bidding at. Apart from the fact that you’ll be incredibly nervous, it’s wise to experience a number of auctions to know what you can expect.
Every property and every auction is different, so the more you attend the more you can observe firsthand the various strategies that bidders use and whether or not they work. The more auctions you attend, the better prepared you will be for bidding on auction day.
- Do your due diligence
Many people are unaware that your finances need to be in place prior to an auction. A purchase at auction is binding, there is no cooling off period, no opportunity to get a bank valuation and no backing out for any reason.
So, get confirmation from your bank or mortgage broker prior to the auction to ensure you are ready to go. A deposit needs to be organised in the form of a bank cheque or a transfer to the agent’s trust account and a Pest and Building Inspection should be done.
There are different strategies that can be applied at auction depending upon the agent and how many bidders are in the room. For example, don’t be afraid to stop the auctioneer and ask questions during the auction.
You can ask whether the house is now on the market. It will slow the auction down and give you an opportunity to regather your thoughts.