Auctions are increasingly becoming more accepted across Australia as a means of selling and buying properties. Here are the key points that buyers should take into account when purchasing a property at an auction.
1. If you have never bought at an auction, you have to see at least five other auctions before you are ready to participate in one. You have to learn the process and understand what’s going on to feel confident when you are bidding on a house.
2. In the weeks prior to the auction, you should inspect the house personally and arrange for building/pest inspections, because once a house is sold at the auction, it’s final.
3. Visit the selling estate agent and get the contract of sale for the house. This contract defines exactly what you are buying and how you are required to pay for it, so read it carefully, ask all the questions and find out everything you need to know before the auction starts.
4. Make sure you have the proper finances in place. Another important matter is that you must have the deposit money ready, because if your bid wins at the auction, you will be required to pay deposit right after the auction closes. You need to money to be readily available.
5. Set a ceiling limit to your bidding. In the heat of the moment, in the excitement and anticipation of owning the house, you could pay too much for the property.
6. Check how much similar properties in the local area have sold for. If the property is unusual, e.g. a waterfront property, then it might be worth considering getting a professional valuation of the property before the auction.
7. If you are unsure about any aspect of the auction, don’t be afraid to ask one of the agents or auctioneer.
8. Take some support with you to the auction, preferably someone with a strong head to stop you bidding beyond your range.
9. If you do not feel comfortable bidding yourself, get a professional or experienced bidder to do the bidding for you.
10. You may be able to purchase “before auction”; the selling agent will advise. Sometimes this is the best method of buying and will avoid all the uncertainty associated with an auction. Not all agents or vendors will be prepared to accept pre-auction offers, but it is worth inquiring.