Auctions have been recorded as far back as 500 BC. 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 sales and sales by a set date. The most common method in Melbourne is the sale by a public auction.
In this blog, we outline 10 auction tips when bidding on a property to ensure you are well-prepared come auction day;
Top 10 Auction Tips When Bidding on Property
Be crystal clear on your finances!
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 unaware 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. Do your own property research.
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 inspections to learn bidding strategies.
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 your budget.
Don’t tell 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 bid in full.
This is to avoid being misinterpreted, i.e. instead of letting the Auctioneer control the bid increments in standard even numbers. Use odd numbers and state the bid in full. Instead of just nodding your head at letting the auctioneer control the bidding. State your bid loud and clear.
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 buyers 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.
Our founder Andrew Date created a video that explains the process of an auction and allow you to go behind the scenes of the and learn some insights.
If you need any assistance with buying, don’t hesitate to speak with one of our Property Buyer Agents at +61 8374 7652 or book a Zoom call here https://calendly.com/propertychat/discussion-with-industry-insider