30 Oct How To Buy At Auction
If you’ve never bid at auction before, it can be confusing. And with such a large percentage of Melbourne properties going under the hammer, it’s hard to avoid.
To help you through the process, here are 6 top tips on the basic rules of auction buying.
1: Check The Facts
Remember – the job of a real estate agent is to sell the property. It’s important to check what they tell you against your own research – data on recent house prices of comparable properties are all easily accessible online. By knowing the numbers, you’ll understand what you might want to bid.
2: Get Legal Advice
Talk to a conveyancer or a lawyer who specialises in property contracts and ask their opinion and advice. It may cost you – but in the end, it has the potential to save you money.
3. Conduct your building & pest inspection prior to Auction
Unfortunately, many Melbourne suburbs have issues with various pests – everything from termites to possums, which can cause costly structural damage. If the former owners have had pets, flea infestation can also be a problem. The latter is not a problem structurally but can be off-putting to potential buyers.
A report from a professional pest inspection business does not cost a fortune but can alert you to work that may need to be done, as well as motivate you to look closer for signs of past damage that may have been covered up.
4. Don’t Rush To Bid
Until the property reaches its reserve price and is actually on the market, don’t even bid. The agent will apply the pressure, especially if they know you are keen, but until the property is genuinely for sale there is no need to lead the bidding. Until then, keep your hands to yourself. More than that, try to keep a ‘poker face’ without showing visible emotion, and do your best to portray an attitude of general disinterest. Real estate agents are experts at reading body language and will look for any sign of an interested bidder – then try to engage with that, even if that means triggering emotions that may make you lose common sense and go beyond your realistic budget.
The reserve price is the lowest price acceptable to the vendors and this is one part of important information that favours potential buyers. The reason? You have the benefit of knowing the vendor’s lowest price but they do not know your potentially highest price.
5. Keep Your Highest Price A Secret
If you’ve done your research on recent sales in the area, as well as talked to your mortgage broker to find out exactly how much you can borrow, you’ll know exactly how high you can bid. Remember – you can’t bid any higher!
6. There’s Always Next Time
You might get outbid at auctions lots of times before you are successful. Instead of letting it get to you, do your research properly and be ready for the next one. Remember, deal of the century (a common catchphrase of the selling agent) happens every weekend!!!
For any questions about your borrowing capacity and how to be successful at your next auction, I am happy to answer any of your questions. Contact us at [email protected] or +61 488 814 148.