Auction day can be a little stressful, even if you’ve had some experience with auctions before. So what are the essential steps for buying successfully under the hammer?
1. Familiarise yourself with how auctions work
Do your research, talk to friends and attend as many auctions as possible before the big day. Practice makes perfect, and the more familiar you are with the bidding process and regulations, the more confident you’ll be when it’s your turn to bid.
2. Get conditional pre-approval
Conditional pre-approval will help you understand how much you can afford. This can not only help with your budget calculations and property search but also shows sellers that you’re serious about making an offer.
3. Conduct thorough inspections
As well as physically inspecting the property yourself, ask the seller for copies of any building inspection reports that may have been prepared. If none have been done, organise pest and building inspections before the auction date.
4. Know what the property is worth
Make sure you take the time to research your shortlisted properties. Look at recent sales of similar properties in the neighbourhood to get a good idea of what the property may be worth.
Our complimentary Property and Suburb Reports can help you research both the property and area you’re interested in. You can search sale listings, suburb insights, demographics and more.
5. Check the contract of sale
Get a copy of the sale contract from the vendor’s agent and have your solicitor check it before the auction. Should you have the winning bid at auction, you’ll have to sign the contract on the day (there are no cooling-off periods for auctions).
6. Register to bid
Depending on which state or territory you live in you may need to register to bid, either before or on the auction day.
Registering doesn’t mean that you must bid; it just means you have the right to bid. To register, you’ll need some sort of photo identification and a document that provides proof of your current address. Commonly accepted forms of identification include a driver’s licence, vehicle registration papers or council rates notice.
Decide on your upper limit before the auction begins, and stick to it. This will help you avoid getting in over your head financially. If you’re successful at auction, you’ll need to have the deposit ready to pay as well as sign the contract of sale.
Approaching bidding as a business transaction, with a cool head and a calm manner, can help you avoid making the wrong decisions in the heat of the moment on auction day.
If you’re planning to attend a virtual inspection and/or bid at an online auction, the process is a little different.