Auctions are a real rollercoaster ride, but do you understand exactly how to win one? Here are some key tips for getting ahead of the competition.
While private treaty sales are popular across the country, Canberra tends to trend toward auctions a little more than the rest of the pack. In fact, CoreLogic RP Data noted that last financial year, more than a third of all listings were auctions!
That's the decision of the vendors and their real estate agents , but what if you want to buy a property in Canberra and don't know the first thing about how to win at auction? Don't worry – we have some of the key tips to help you out.
While you can take your time with housing finance in a private treaty sale, at auction you need to be prepared . Auctions don't have a cooling-off period so if you win, you will pay a deposit of 10 per cent there and then. If it turns out that you can't put your money where your mouth is, there can be hefty fees.
Going to a mortgage broker or a bank to get pre-approval is key – then you know exactly what you can spend, and bid with confidence.
What do you need to tick off to be a successful auction buyer?
Don't get in over your head
Auctions are high action, high tension and high stress. With bids coming from left and right, it is easy to get overwhelmed and not know when to bid. Conversely, you can get caught up in the bidding and lose your head, extending yourself well beyond your means.
Like the British always say – keep calm and carry on. Remember, you can always get a real estate agent to bid on your behalf if you don't feel up for it.
Check the paperwork
Auction sales are unconditional – the property is not going to be subject to a pre-settlement inspection. This means you need to carefully go over the documents provided that detail the property before you start bidding. This lets you know about any structural faults or quirks that could mean expensive renovations down the line.
Go in blind at your own peril!
If it passes in, all isn't lost
You might think that if bids don't reach the reserve price outlined by the vendor or auctioneer, then the auction is over. However, if you were the highest bidder – or even a regular bidder – and the property passes in under reserve, you may be able to negotiate with the vendor to secure a sale on the day.
Auctions are exhilarating, but they are governed by such strict rules that it's vital you fully understand the process. Get in touch with the team at Peter Blackshaw if you want to learn more about how they work!