Going to an Auction first time can give you many unexpected surprises. So it’s always better to consider these 11 Tips For Bidding at an Auction
- Have your pre-approval ready. Either talk to a bank or talk to a mortgage 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 overbid for a property and will know your financial limits. - Has the valuation of the property been done?
Again either talks to your bank or talk to a mortgage broker about getting a soft valuation done.
Why is it important: It will help to know what is the likely valuation of the property in case you buy it. Please keep in mind that if you overbid and the 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.
This is the most important among the 11 Tips for bidding at an Auction. Please note that once the hammer strikes, the property is sold at auction and there is no cooling-off period. The property is yours. - Have building and pest inspections been done?
Since the property is sold at auction, it is in your best interest to get a building and pest inspection done before the auction.
It is the cost that you have to bear in case you don’t win at the auction. - The Fifth Point in Tips for Bidding at an Auction is Contract review by a solicitor
It is important to get the contract review done by the solicitor before hands.
Get all types of due diligence also done beforehand. - Don’t start the bid.
There is always one person at the 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. - The seventh Point in Tips for Bidding at an Auction is the 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 time, the highest bidder will get a chance to negotiate. - Be confident
If you have done your homework 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, and 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, is the start of yours.
It breaks the confidence of other people and may give you an edge over others. The small trick, which works sometimes. - Deposit
If you win, you have to pay the 5% or 10% as per the contract. - Insurance
If you win, it is a good idea to get building and contents insurance and other types of insurance from the auction day. - To Summarise Tips for Bidding at an Auction
Auction is a great experience and if you do your homework and due diligence and involve professional people in the process, it will turn out to be a less stressful and fun experience. These tips for bidding at an Auction will assist you in the entire journey.
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Disclaimer: – Articles in this blog are just the personal opinions 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 content in this blog.
