Auctions can be a very daunting, unnerving experience so here are five tips for increasing your chances of success at auctions.
1.Preparation is key:
Research the area you are looking to buy. Understanding the Melbourne property market is not enough as property ‘markets’ tend to be more provincialized. The Caulfield market for example is filled with buyers looking to extract value from every property, which is why land or spacious backyard properties are in hot demand. But by that same token if you stretch further into certain territories of Caulfield South you would find it hard to get approval for some common development proposals because of the movement against inappropriate development. If you don’t know the are to buy and you need help researching there are loads of research articles online, or you can speak to your broker or buyers advocate.
2. Research comparative sales in the area:
Unfortunately, in the Melbourne property industry, real estate agents tend to underquote to bring more people to auction to help drive up the price. If you order a research valuation from a broker or buyers advocate upfront you can know more accurately what price a property will go for.
3. Attend other auctions to familiarise yourself with the process:
If you can’t be bothered going to the auctions check out the Facebook live auction streaming page. You can’t bid, but you can consider the psychology of bidding wars and the general script that auctioneers follow.
4. Be finance ready:
Have your pre-approval organised will give you the confidence to bid knowing you can afford your set limit. Never make your limit a round number like $400,000 make it 405,000. On the day of the auction make sure you have 10% in an account with a cheque book it appears most agents do things the old-fashioned way.
5. Do your due diligence:
Obtain a copy of the contract/section 32 and have this reviewed by a solicitor.
Conduct all inspections building/pest before auction as there is no cooling off and no clauses for sale at auction.
So whether you plan to go in hard and fast at an auction. Or take the sidelines until you see an opening. There is more to an auction than just auction day. Coming prepared will put you in a good position to know your limit and know the value so that you have the confidence to succeed.
