Buying a house at auction is exciting, but it’s easy to go over budget. Unlike private sales, which can take days to complete, buyers and sellers have no time to negotiate over price during auctions.
You may feel compelled to make an outrageous bid to avoid losing your ideal property. So, auction bidding requires a strategy to make it less stressful. Keep calm and follow our tips to enhance your chances of getting a good deal.
Follow These Tips When Buying A House At Auction
Check Building And Pest Inspection Reports Before The Auction
The sellers should provide these reports before the auction. To avoid unpleasant surprises, conduct a thorough inspection before making an offer. Then, ask the selling agent if you can bring your builder to inspect the house. Take advantage of this opportunity to inspect the property before the auction.
Review The Contract Of Sale
There’s no cooling-off period during auctions. Make no offer on a property unless your lawyer approves it. Review the contract before and after the auction to ensure there are no legal issues. If you win the bid, you’ll be required to sign the contract immediately, so you should familiarise yourself with the contract agreement.
Obtain Pre-Approval For A Home Loan
Even if you win an auction, you could forfeit your deposit and be held liable for the vendor’s damages if you can’t prove your financial capabilities. Pre-approval for a house loan can help you prevent this; it gives you an idea of how much a lender is willing to lend you, so you know your bidding budget.
The Auctioneer’s Rules Must Be Followed
The auctioneer will explain the rules, which differ from state to state. Typical examples are:
● A vendor can only make one bid.
● A vendor bid is a means to direct the auction towards the targeted sale price.
● The auctioneer can reject offers that don’t interest the seller.
● The auctioneer can’t accept a bid after the hammer falls.
● If a bid is challenged, the auctioneer will help negotiate.
● No dummy bidding.
Make A Bid On The Auction
Once the auction begins, you can start bidding. As more people bid and the reserve price is reached, the highest bidder wins the auction. A seller may decide to negotiate a deal or keep their property on the market if they are not satisfied with the highest bid.
Despite the pressure, don’t go over budget. After the thrill wears off, you may have trouble financing your property. So, set a limit and adhere to it, no matter what happens. Attend a few auctions to become used to the atmosphere and processes. If you didn’t win in your first attempt, don’t give up— there are many opportunities.
Contact us today to speak with an expert who can help with the auction process.