Rookie mistakes to avoid at auction
A home auction combines the grace of figure skating with the brutality of ice hockey. But as with all sports, preparation is key. We’ve got some helpful tips to ensure you make a confident debut come auction day for your best shot at a winning result.
This one is super important. You’ve found that dream property up for auction in a few weeks. The first thing you need to do is arm yourself with documentation and a positive mindset. Finances come first: find out how much you should be able to borrow (yep, we have a tool for that), set yourself a maximum bid, and be prepared to bow out gracefully if the auction goes over it.
- Know your maximum bid and stick to it
- Get yourself a Buyer’s Agent: If you’re someone who struggles to keep your emotions in check then maybe you’re not the best person to do the bidding. Consider asking a responsible friend, relative or buyer’s agent.
- Market research: Look through recent sales in the area so you know if you’re getting value for money.
- Stamp duty and First Home Owners Grant: Know the full costs of buying a home and ensure you include these into your maximum bid.
Pro tip: It’s great to go to a few auctions in the lead up so you know what to expect. You can play along (silently, please), watch some pro-bidders and get a sense of what to expect.
Contact a Conveyancer
Yeah, the place looked nice in the photos and ticked all the boxes, but that shouldn’t be enough to hand over your life savings. This is where a Conveyancer comes in.
- Reviewing the contract
- Arranging pest and building inspections (or point you in the right direction if they don’t do this themselves)
- Reviewing a Strata Inspection Report if relevant
- Organising the transfer of the property into your name
Look around for market reports and similar recent sales from the area. Make sure you know how hot the market is.
Speak to the agent to see if you can get an idea of how many other potential bidders there might be. Ask them about similar sales in the area.
Pro tip: Ask friends and family who have auction experience who they’ve used in the past if you’re not sure where to start.
Bring some auction-day life support
Auctions can bring out a competitive streak you never knew you had, one that could cloud your judgement and burn a hole in your bank account (particularly if you’ve lucked out on a few auctions prior).
Bring along someone who can calm your senses and talk you out of a rash decision. Give them full permission to tackle you to the ground secret-service style if they have to. Just have someone there to keep you grounded.
Pro tip: As mentioned, you can nominate a third-party to do your bidding for you (while you’re on the phone with them). It’s not as exciting but if you think your emotions may get the better of you then it’s worth considering.
Bench your emotions
Auctions are equal part terrifying and exhilarating, requiring you to balance an unnatural over-confidence against the willingness to stop on cue.
Get in early, avoid persuasive real estate agents, position yourself at the front of the pack and bid with confidence.
Just know your limits, have a friend to shut down your competitive drive and go in with a full stomach (you don’t want any distractions).
Pro tip: If the auction looks like it’s going to pass in, the highest bidder gets first right to negotiate!
Once you’ve won, then it’s time to put the champagne on ice. You’ve stood your ground against the competition, so make sure it’s the good stuff as you toast to your new home!