Auctions can be stressful, heartbreaking, and exhilarating, but a little homework will set you up for success.
If you're new to the rough and tumble of an auction, heed these five tips to get an edge on the competition.
- Attend a few auctions before you’re ready to buy.
Auctions can be intense, and emotions can run high. There is often a crowd of people out in the street, sometimes blocking traffic; the auctioneer is creating excitement, and no one knows who a serious buyer is and who’s just there to watch. So, go to a few auctions to get accustomed to how they work, the way people bid, and how the auctioneers try to steer the bidding. Then, when it’s you in the ‘hot seat’, you’ll be more confident.
- Understand what the value of the property is.
Try to go to auctions for the sorts of property you might want to buy and in the locations you’re interested in. Take note of the advertised price guidance and then how closely the auction result matches that. The price a property is advertised at needs to reflect the market in some way—but it is there to maximize interest in the property, and then anything can happen at auction. Going to auctions, hearing the result, and comparing it to the advertised price guidance will give you a good sense of what to expect at future auctions for similar properties. If you’re still in the dark after all that, you can always contact BankVic—we’ll be happy to help with your valuation needs.
- Have your finances in order.
If you’re going to bid at an auction, then you’ll need your finances in order. Make sure your home loan is pre-approved, your deposit is ready, funds are set aside for stamp duty, and know what your hard “under-no-circumstances-will-we-go-over-this-limit” bid will be. Make sure you have looked through all the documents before the auction, and if anything bothers you, ask your conveyancer for clarification. Auctions can be intense when you are locked in competition with another keen bidder. There is no room for doubt or uncertainty. Know your facts and your numbers, and stick to them.
- Visit the property a few times.
You’ll probably want to visit properties you’re interested in a few times. The first time to see if you like it, other times to look at it in more detail. Each time, pay attention to who’s there—are you seeing the same people? Are there a lot of people or just a few? Do they look like they might be buying it as a home to live in or as an investment? All these things will give you little insights into the type of interest there is in the property and what to expect on auction day.
- Keep your cool.
Auctions can be stressful. Expect to be nervous, as you are potentially making a life-changing purchase in front of a large crowd. Stay cool, trust yourself, stick to your budget, and know that there is always another property if this one doesn’t work out. Consumer Affairs Victoria’s ‘Real Estate: a guide for buyers and sellers’ is also a useful reference source, which is available on the Consumer Affairs Victoria website.
Contact BankVic to chat about home loans.
Information in this article is general in nature and does not take into account your objectives, financial situation, or needs. You should consider whether it is appropriate for you before acquiring a product or service. Police Financial Services Limited ABN 33 087 651 661—trading as BankVic | AFSL and Australian Credit Licence 240293.
