Spring is upon us and along with weather, auctions are heating up. Bidding is not for the faint-hearted, but a little preparation will go a long way. Below is short list designed to get you on track to finding your new home or next investment on the auction circuit.
- Set your limit before you start. This sounds like one of those ideas that goes without saying, but it is amazing how many people get carried away in the heat of the moment and bid far above their actual budget. Make sure you have a pre-approved loan amount and remain within the limit you have discussed with your lender.
- Start researching property prices in your chosen area. Try to attend as many auctions as possible, as this will give you an insight into how auctions work, and give you a good idea of property values. You should also keep an eye on the price of properties sold via auction and private treaty in your chosen area. Results are usually listed in the Real Estate section of Saturday papers. If you are interested in bidding on a particular property, try to visit similar properties for sale to get an idea of market price.
- Arrange professional support before you start looking. Researching conveyancing firms and pest and building inspection companies before you find a property can save you time and money. You will have support in place if you find a property and want to move quickly, and you can access expert advice while you are searching for the right opportunity. If you are unsure about bidding, you can also have a property professionally valued before auction, and use a buyer’s agent to bid on your behalf.
- It is important to inspect before you buy because it is rare to have an auction contract subject to satisfactory building and pest reports. Request building and pest inspection reports from the vendor. If none are available, arrange inspections, which should include reviews from a licensed building inspector and a pest controller.
- If you live in New South Wales, Queensland or Victoria, you will need to register to bid on the day of the auction. This rule does not apply in South Australia, Tasmania, the Northern Territory or Western Australia. Formal identification is required when you register to bid.
- When you finally find the right property, and your bid is successful, engage a conveyancer or solicitor to examine the terms and conditions, and ensure all legal obligations have been met by both parties.
If you stick to your limit, do your research, listen to expert advice and follow the rules, auctions can be an enjoyable and rewarding experience.