Disclaimer: – Articles in this blog are just personal opinion of the
author or authors. It may or may not be correct. Pls do your own due diligence and pls seek professional advice according to your own personal circumstances. The author or authors cannot be held responsible/liable for any contents in this blog.
Going to an auction
Tips to consider when planning to bid at an auction
- Have your pre-approval ready. Either talk to a bank or talk to a mortgage broker broker. If you don’t have one, you can always talk to the group mortgage broker by Contact Us.
Why is it important:
It will help to know your borrowing power as you will not over bid for a property and will know your financial limits.
- Have the valuation of the property done.
Again either talk to your bank or talk to a mortgage broker about getting a soft valuation done.
Why is it important:
It will help to know that what is the likely valuation of the property in case your buy it. Please keep in mind that if you overbid and bank valuation comes low, you will have to pay the difference from your pocket.
- Property is sold at auction and there is no cooling off period.
Please note that once the hammer strucks, the property is sold at auction and there is no cooling off period. The property is yours.
- Have building and pest inspection done.
Since the property is sold at auction, it is in your best interest to get building and pest inspection sone before the uaction.
It is the cost that you have to bear in case you dont win at auction.
- Contract review by solicitor
It is important to get the contract review done by the solicitor before hands.
Get all types of due diligence also done before hand.
- Don’t start the bid.
There is always one person at auction, who starts the bid. For a 1 million property, the person will usually start at 300K.
Don’t be that person. Start bidding towards the end.
- Reserve price
Please keep in mind that every property has a reserve price. It is usually sold once that price is met.
When the reserve price is met, the auctioneer usually announces it and you should be more vigilant as it means that the property is likely to be sold.
- Passed in
If the reserver price is not met, the property usually passes in.
It means that most of the times, the highest bidder will get a chance to negotiate.
- Be confident
If you have done your home work and have considered the above point, it is important to be confident.
Keep all distractions away and stand in clear sight of the auctioneer.
Start bidding at the end when others are doing 1000’s, break the momentum by doing 2000’s or 5000’s at the end.
It gives a clear indication that what is the end of others, it is start of yours.
It breaks the confidence of other people and may give you edge over others. Small trick, which works sometimes.
If you win, you have to pay the 5% or 10% as per the contract.
If you win, it is good idea to get building and contents insurance and other types of insurances from the auction day.
Auction is a great experience and if you do your home work and due diligence and involve professional people in the process, it will turn out to be less stressful and fun experience.