Ten Tips to be Ready for Auction: Part One

Does the idea of bidding at auction make you queasy? Don’t worry, our top tips make it easy.

This article will help you be prepared, bid with confidence and win.

1. How to win at auction: Part One

Auctions are a very successful way to sell houses. Historically, they are a smart choice to get top dollar, and recently auctions have been even more successful than ever for the people selling their homes.

As a buyer, though, bidding at auction can be intimidating.

Buying a new home is stressful enough, without the added pressure of performing when surrounded by crowds at an auction. Even after an indication of the expected price from an agent, it only takes one or two people to get carried away, and you can find yourself in a ridiculously escalating bidding war.

The key if you want to win at auction, other than having a good budget, is to be confident. This article and its follow up share ten vital tips to help you ‘bid better’ so you up your chances of the hammer falling in your favour.

2. Do your research

Research is one of the most critical aspects of buying a property. Before you even think about winning at auction, you should find out as much information as you can about the property and the suburb it’s in. You will want to know how much any comparable properties in the area have sold for recently.

As part of your research, check whether there are any additional features like a swimming pool or tennis court that could affect the property’s value. Doing your research ensures that you understand the value of the property you will be bidding on. Without that knowledge, it is easy to overpay.

3. Organise your finances

If you win at auction, the contracts become legally binding at the fall of the hammer. If you don’t have your finances in order, there’s no way of pulling out. Once you’ve signed the contract at the auction, you can’t pull out without suffering legal consequences.

Speak to your banker or mortgage broker well before the auction to find out how much you can borrow. Knowing your limit will help you see when you need to pull out of the bidding. Having your finances sorted and even getting pre-approval for a loan will also make the process much smoother when it comes time to handle the paperwork.

4. Hire a legal advisor

You need a licensed conveyancer or solicitor to review the auction contract and explain your rights and obligations. Doing the conveyancing yourself is not advisable because there is so much fine print to be aware of.

Whether it’s a negotiation over the length of the settlement or the percentage of the deposit, any changes to the auction contract will need to be negotiated before the auction. Having a legal representative will make these negotiations much easier and can even give you a hand with this part of the process.

Organise your property inspections

Inspect for the unexpected!

A fresh coat of paint can hide so many things, particularly when it comes to moisture and water penetration. You never know whether paint is hiding something sinister that will cost you thousands of dollars to repair. It is critical that you organise a pest and building inspection report for the property.

A building inspector will be able to advise you on the structural soundness of the property, whether there are any additions or renovations that the owner has made, and whether it complies with building standards. The inspector may also point out any areas of concern that will require immediate repairs. Some inspectors will even give you a dollar figure to indicate how much those repairs will cost you. It’s important to keep this in mind when you’re bidding at the auction.

A pest inspector will provide you with information regarding any past or present termite activity and provide a detailed description of any pest infestation or damage that has been done to the property. The report will also advise you on the level of risk that the property has in terms of the possible termite attack and provide you with the best cause of action to remedy or mitigate any future attack.

5. Hire a buyer’s agent

Bidding at auction is stressful, especially if you don’t feel confident. A buyer’s agent can do your bidding (pun intended), freeing you up to focus on other things.

A buyer’s agent can attend the auction on your behalf. They can do everything from researching the property market and finding you a property based on your criteria to helping you with settlement. Check out our recent article on buyer’s agents to learn more.

Keep reading.. you’ll find part two of this guide here.

Thorpe Conveyancing provides reliable, cost-effective conveyancing to home buyers and sellers in Sydney and beyond. Get a quote for our services today.