Auctions in Canberra are becoming increasingly popular. In 2017 alone, we had 2,500 auctions across the city – proving auctions are quickly becoming a preferred sales method for sellers.
But what does this mean for buyers? Every weekend eager home buyers spend their weekends looking for the perfect home and often find themselves competing against others at an auction.
Auction days are exhilarating; the thought you could be purchasing your dream home is very exciting for many. For others, auctions can seem quite daunting.
The more prepared you are and the more understanding you have of the auction process, the more comfortable you will feel. To help you on auction day, we have put together these key tips.
Arrange your finances
The first step when looking to buy at auction is to get pre-approval on your finances. Unlike private treaty sales, auctions don’t have a cooling off-period so if you win you will be asked to make an immediate deposit. Should you be successful on auction day, it’s important you have everything in place.
Going to a mortgage broker or bank to get pre-approval will also help you to know how much you’re able to bid for a property. Knowing exactly what you can afford will help you to bid with confidence and stop you from getting carried away on the day.
Don't get in over your head
With bids coming from left, right and centre, it’s easy to get overwhelmed. You could unintentionally get caught up in the bidding and extend yourself beyond your means or lose track as the momentum of the auction picks up.
Bring a family member or friend with you to help you stay calm and focussed. If you need help and are already working with an agent, ask them for advice or to bid on your behalf. An experienced agent will know how to bid strategically and will work with you to get the best possible outcome.
Check the paperwork
Auction sales are unconditional, and the property is not subject to a pre-settlement inspection. This means it is important that you do your research and read all the paperwork provided to you. If you are interested in a property and intend to register for the auction, ask the agent for a copy of the contract and building report. Go over the paperwork with a fine-tooth comb; this is your opportunity to learn of any structural faults or quirks the property may have.
Reading the contract prior to auction day will ensure a smooth transaction if you are the successful bidder. You and the seller will have a clear understanding of what happens next and the responsibilities of both parties.
Doing your research now could save you renovations or maintenance costs down the line, as well ask keeping you calm on auction day.
Have a strategy
Come auction day emotions can run high--the adrenalin of bidding kicks in and the nerves are heightened as you try to win your dream home. With research and a clear strategy, you will be able to bid confidently.
1. Get a prime location
Arrive to the auction early and choose a spot close to where the auctioneer will stand. This will give you the best vantage point, you can clearly hear the auctioneer and will be able to scope out other bidders.
2. Pay attention to body language
You may be able to determine if another bidder is reaching their limit by reading their body language, this will help you to know if you should bid higher or hold back. Facial expressions, having a discussion mid-auction or making a phone call are important signs to look for.
3. Be confident
Call out your bid loudly and with confidence. Hold your auction paddle high so the auctioneer notices you and hears your bid. Don’t be afraid to ask the auctioneer to repeat themselves if you lose track of the numbers.
If it passes in, all isn't lost
A property may pass in if bids don’t reach the reserve price set by the vendor or auctioneer. If you are the highest bidder, you will have the opportunity to negotiate a price and could still secure a sale on auction day.
Auctions can be overwhelming but remember they are governed by strict rules to protect both the seller and bidders. Contact the team at Peter Blackshaw if you want to learn more about buying an auction and how we can help.