Auctions can be intimidating, especially if you're a first home buyer or have never attempted to purchase at auction previously. But it can be a fun experience and has the potential to result in a great purchase. Here are three tips for buying a home at auction:
1. FAMILIARISE YOURSELF WITH THE PROCESS
If you have time, attend auctions of similar properties to what you are looking for and in the same suburb. Listen and watch the process and become familiar with how it works. This will allow you to form a better understanding of the local market and to get comfortable with the auction process.
2. SET A BUDGET
It is easy to get caught up in the pace of an auction and the desire to win. Overcome this temptation by setting a budget before you start. Know your upper limit and be strict with yourself on stopping at that limit. However, also consider having a small contingency set aside in case the difference between winning your dream home and not getting it is a matter of $1000 – $2000. Over the lifetime of your loan and property ownership, a small amount of extra money may be worth spending if you truly feel the property is worth purchasing.
3. BE INFORMED
Ensure you have done your due diligence on the property itself. Make sure you have a building and pest inspection in hand and all your finances prepared. If possible, have your solicitor to look over the contracts in place prior to auction. Make sure that you know what conditions are in place, as most auctions require a deposit to be paid on the day.