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According to a report released by CoreLogic on 18 May 2017, “The number of auctions scheduled to take place across the combined capital cities is set to rise this week, with 2,619 currently being tracked by CoreLogic, up from 2,409 auctions last week, and higher than the 1,920 auctions held over the same week last year.”

In March, clearance rates across capitals rose to 80.8%, the highest level since mid-March 2015. Data suggests that demand is high in the housing market with the clearance rates picking up despite an increasing number of listings.

things-to-consider-before-going-for-property-auction

Undoubtedly, many Australians are buying properties at auctions. However, there are many others who are intimidated by the thought of buying at an auction. Well, we wouldn’t blame them completely – property auctions are emotionally charged up events, and you have a lot at stake. Especially if you are attending your first auction, you may find the entire process daunting; not just because of the competition but also because of the jargon flying around. However, with a little bit of preparation, there is no reason why an auction should be difficult for you. To make things easier, we tell you 10 things you need to do before attending a property auction:

1. Register yourself – In some states, it is necessary to register yourself before you can bid at an auction. Your real estate agent or Real Estate Institute can help you understand the law in your State. However, even if you have registered yourself as a bidder, there is no obligation to bid.

2. Attend auctions – There is no better teacher than experience. Before bidding at your first auction, attend a few auctions in the area to familiarise yourself with the rules, regulations and strategies employed by the winners.

3. Understand the market – Before you bid on a property, research the market and compare similar properties in the area that have sold recently to get an idea of the market value of the property you intend to buy. You could order a free property report to understand the dynamics of the property market better.

4. Do your due-diligence – The contracts signed at an auction are unconditional and binding on both the parties. Thus, it makes sense to be doubly sure before you bid on a property. Visit the house as many times as required before the auction process to be sure that it fits your requirement. Here is a checklist of things to consider when buying a house. Once you decide you like the property, it makes sense to get a proper inspection done by experts.

5. Know your limit – Before you head for an auction, decide on the maximum amount you are willing to pay for the property. Seasoned auctioneers always have two prices in mind – one that they would like to pay and the maximum amount they are willing to pay. Once at the venue, stick to your guns; if the bidding goes over your limit, STOP bidding and walk out.

6. Review the contract – Before the auction day, make sure that you take the help of a solicitor to inspect the agreement for sale so that any modifications may be negotiated with the seller in time. Typically, the contract of sale includes standard auction conditions, financials, and details about the settlement period. You could negotiate for an extended settlement period or a fixed deposit amount to suit your situation.

On the auction day…

7. Arrive early – It is advisable to arrive early on the day of the auction and find a spot that allows you a clear view. Moreover, it is important to take a position where the auctioneer can clearly see you and hear you when you are bidding.

8. Bid confidently – Once the auction starts, participate confidently. When bidding, state the amount that you are offering clearly, without any hesitation. This will give you the psychological edge over the others. If you feel you won’t be able to handle the process calmly, it is possible to take the help of a professional agent or family/friends.

9. Be your own guide – Once at the venue, it is easy to be influenced by pushy estate agents and the others bidding around you. However, as a savvy property investor, you must keep your calm and not give in to anyone else’s ideas. Since you have done your research and are prepared for the auction, you know the market value of the property, and you need not go beyond your limit just because others are nudging you to.

10. Keep the funds ready – Yes, never attend an auction before checking your borrowing capacity and getting a home loan pre-approval. Having a home loan pre-approval means you exactly know how much you can spend. This will ensure no complications lest you win the auction and cannot manage the full amount later. You would also need a 10% deposit ready.

Getting a home loan pre-approval is quick and easy. You could compare home loan rates online or get in touch with mortgage brokers at HashChing, who would assist you in every step of financing your property.

By Vidhu Bajaj

 

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HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.