find the one only to discover it is for sale by auction it can be perceived as a serious It can take many months for people to find the perfect home for them, and when they problem. Many people are afraid of buying a property at an auction and will disregard a likely prospect if that is the sale method.
However there is no need for such an extreme response as auctions are not as daunting as many home buyers believe providing you know what you are doing. There are a few tips that should be kept in mind when buying at property auctions.
1 Do your research
The first step you need to take is to make sure to do your research. In order to make confident bids at a property auction you should do your homework in regards to your local property market and also learn about the property auction process.
It is a good idea to gain some knowledge of auctions and to even attend a few auctions that you are not interested in bidding during so that you will become familiar with agent strategies. Learn who the auctioneer is and go to their other property auctions so that you gain an understanding of their style, which could provide you with an advantage in comparison to other bidders.
2 Set your budget limit
You should make a decision as to how far you are willing to stretch your budget no later than the night before the auction takes place and stick to it even if it means you do not win. This decision should be informed by your pre-approval limit as well as market research.
Auctions can be exciting and emotional but you cannot let these feelings override your logic and end up paying more than you can really afford.
3 Examine the contract carefully
It is crucial to get a copy of the contract from the agent and have your solicitor look it over to make sure no hidden clauses are overlooked. Your lawyer can review the contract, inform you about any issues and protect your interests by spotting any terms that may require negotiations.
When you bid at an auction you accept the terms of that contract. You may need to alter factors such as the deposit amount or the terms of settlement, and these conditions need to be finalised prior to the property auction.
4 Sort out your finances
In many states in Australia there is no cooling off period at an auction, unlike with a standard sale, meaning that if you win the auction you cannot change your mind even if you can’t afford it. It is therefore vital to sort out your finances before the big day to make sure you can settle. Talk to your bank or mortgage broker in advance for pre-approval for finance.
5 Get help
If buying at an auction is still scary, get help from a professional or friend. Talk to buyer’s agents or homeowners to get more info on auctions.
Property auctions should not scare you away from a house you want and represent an excellent buying opportunity.
