Tips For Buying At Auction

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.

I attended several auctions in past years and have collected a few tips for anyone who is preparing to buy at an auction.

  1. Once you have made up your mind to buy in a particular location, don’t hop much. There is no need to go one week to Hornsby (or Glen Waverly for Melbourne people) and another week to Schofields (or Tarneit for Melbourne). Focus on one suburb.
  2. Get your finances and pre-approvals for mortgage. Know your maximum borrowing power.
  3. Get a cheque book issued in your name. It is a very handy tool to pay in case you win at auction.
  4. Go to the auctions in your targeted area and see the atmosphere at an auction. Check whether you will be able to face the competition and the perspiration that goes with the auction day.
  5. Learn the style of the auctioneer, how they say, what they say, how they motivate people.
  6. Write down the price the property was advertised for and note down what it sells at auction. Note down the difference, sometimes the difference is 200k.
  7. Be prepared to get the building and pest inspection done for your targeted property.
  8. Talk to your solicitor and get the contract reviewed of the targeted property. Ask the solicitor to add all the required clauses, for example 5% deposit instead of 10% etc before the auction.
  9. Don’t give too much financial information to the real estate agents (don’t show all your cards).
  10. Be informed that there is reserve price for each property, so if that is not met, usually the property is not sold at auction.
  11. Be informed that you may have to take building and contents insurance on the auction day to get rid of any issue that may happen between auction day and the settlement day.
  12. On the auction day, wear confident clothing, keep any distractions at bay.
  13. With your spouse discuss the ‘walk-away price’ that is the price up to max which you will bid and if you don’t get it, you will walk away from the property.
  14. Arrive early, check any last-minute things.
  15. Stand in clear visibility of the auctioneer and everybody else in the room.
  16. Don’t open the bid, let others play first.
  17. In the middle or towards the end, jump in, say your bid in whole number, for example 850000 instead of saying another 5K.
  18. Show confidence with your eyes, your smile, your clothes (best is to wear top branded tommy Hilfiger clothes).
  19. It should reflect that you are not going to stop now, no matter what happens, you will buy it. It is because you have done all your due diligence, you have talked with your mortgage broker, reviewed with your solicitor, got building and pest done, and you know your ‘walk-away’ price.
  20. Make sure if it looks like that the property will be passed-in, then you are the highest bidder to negotiate in the closed room.
  21. Be prepared to ‘miss out’ under reasonable circumstances. It is just a property and not the end of the world.
  22. Even if you don’t get the property, still you will get a good experience, which you can use in the next auction.

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