Five tips for buying at auction

Opinion is divided as to whether auctions are a good or a bad method for selling property. Some people love being face to face with their competition and the open and transparent sale process.  Others dislike the fast pace and the pressure that produces sale prices based on emotion rather than logic.  There are pitfalls that exist for buyers, vendors, agents and auctioneers undertaking this stressful and exciting experience.

The following tips can help those wanting to buy property at auction to avoid a few headaches:

1. Know what you’re buying.  If possible, inspect the property early and work out an appropriate value.  A valuation or property report from myrpdata can be a useful at this stage.  If they haven’t already been done, undertake pest and building inspections to keep you from being potentially locked into a property full of nasty surprises.  Attend a few other auctions to get a feel for the process and learn to recognise common auctioneer and buyer tricks.
2. Prepare in advance.  Have an upper limit on what you’re prepared to pay and be ready to stick to it.  Try to make your upper limit a non-round number, as it’s common for auctions to finish in between two price milestones.  If you need to have special revisions made to the contract, sort these out with the agents before the auction as you’ll face hefty penalties if you find yourself unable to complete a sale.
3. Be cool.  Don’t bid before you have to.  Keep you emotions under control and treat the auction as business to make the clear decisions needed to come out on top.
4. Take control.  Bid when you choose, not necessarily when prompted by agents or the auctioneer, whose job it is to convince you to spend money.  Offer bids of a higher or lower value to what’s on offer and make the room work for you.
5. Don’t panic if your final bid is passed in.  In this case, you still have the first right of negotiation, so it's worth trying to get into this position even if it looks like the property won't sell under the hammer.

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Ajay Krishnan
Aussie Home Loans
0434 145 733

ajay.krishnan@aussie.com.au

Artice courtesy of RP DATA