Auctions have been recorded as far back as 500BC. The Romans used auctions and since then this method of sale has been continually used throughout the ages.
In Melbourne, there are many different ways an agent can sell a property. Expressions of Interest (EOI), Price on Application (POA), boardroom auctions, private sale and sale by set date. The most common method in Melbourne is the sale by public auction.
In this blog, we outline a few tips to ensure you are well-prepared come auction day.
1. Ensure that you are pre-approved for finance before bidding. Speak with a mortgage broker or your financial institute to ensure you can afford to borrow the amount you require to proceed with purchasing the home.
2. Ask the selling agent for specific terms that suit your situation. Many buyers are not aware they can ask for a shorter or longer settlement period than the vendor is requesting. You can in some circumstances, request to pay a 5% deposit instead of 10%.
3. Send the contract of sale and vendor statement to your solicitor to read over before bidding. This helps mitigate the risk involved when signing the paperwork.
4. Arrange for a building and pest inspection before bidding on the property. This is critical when buying at auction because there is no cooling off provisions when purchasing at a public auction in Victoria.
5. Complete your research by inspecting as many properties as possible and learning what other similar types of properties in the area are selling for.
6. Attend at least five auctions and learn as much as you can about the different bidding strategies. Watch the auctioneer who’ll be selling the property you’re interested in to learn the particular techniques and strategies they use to get the buyers to continue bidding.
7. Don’t disclose to the selling agent how much you have to spend or exactly how much you think the property is worth. Play your cards close to your chest.
8. Call out your offer in full to avoid being misinterpreted, i.e., say $650,000 instead of increments such as $5,000.
9. Never, ever bid on top of yourself. This might seem like a no-brainer, but it is amazing how many times I have seen buyer’s bid against the auctioneer or themselves when they should have simply said no and kept to their original bid.
10. Set your budget and do not go over it! There are more homes out there and paying an emotional price for a property can be one of the worst mistakes you can make.
Hire a professional Buyer’s Advocate to help remove the stress involved in buying a property at auction. We can also evaluate the property, unlock properties for you to see that are not available on realestate.com.au, complete your due diligence and negotiate the property before it goes to auction.
Call me today on 0402 346 810 to find out more about how I can help you save valuable time, money and help remove the stress of purchasing a property.