Our top 10 tips for bidding at Auction
1. Do your homework
If you’ve been property searching for a while, by now you should have a good idea of market values in a particular location. Keeping a record of the properties you’ve looked at with some notes on inclusions, positives, negatives and eventual sale price will prove to be very useful when it comes time to bid at Auction.
The selling agent will give you a price range together with some comparable sales to substantiate however if you’ve been doing your research you will already have enough information to make an informed assessment of the property’s value.
2. Be prepared
In the lead up to the Auction there is some due diligence required on your part:
- Have the contract reviewed by your solicitor.
- Request a pest & building report.
- For a unit or townhouse, have the Strata books reviewed by a professional inspector.
- Most importantly, obtain pre-approval for your finance.
3. Be Familiar with Auctions
Attend at least 10 Auctions as a spectator to get a feel for how they work. Once you get used to the process, it will make life much easier when it’s your time to bid. Do some research online or write down your questions and email them to the agent so you are fully prepared. Knowledge is power – and will help you remain calm and collected on the day.
4. Show the agent you are interested
The agent’s role during the campaign is to find out as much about your situation as possible including budget and thoughts on price. If you take the approach of not returning their calls and acting disinterested, then you risk the agent selling the property prior to Auction to somebody else without giving you the chance to make an offer. This happens all too often. So make sure the agent knows you’re planning to come to the Auction so they keep you informed every step of the way.
5. Bid early, start low
Nobody likes to open the bidding at an Auction. However depending on the situation, if you bid early and relatively low, you will have enough time to adapt to the situation and settle your nerves somewhat before the serious bidding starts. Responding in rapid succession to your competitor’s bids is a display of confidence and deep pockets.
6. Be confident
Call out your bids loudly and with confidence. State your bids in the whole dollar amount rather than the increments the auctioneer is calling out. In other words, “$505,000”, not “$5,000”.
7. Set yourself a limit
From your research, set a limit based on what the property is worth to you. Take into consideration any renovations required, immediate repairs, how long you plan to live in the property and obviously what other comparable properties have sold for in the area.
It’s not a good idea to bid more than your budget. Your absolute limit should be what the bank is willing to lend you plus your saved deposit. Write it down on a piece of paper if that helps to remind you.
8. Consider using a buyer’s agent
If you are still extremely nervous or unable to physically attend an Auction, consider the professional services of a buyer’s agent. Prices can range upwards of $200. Learn more about buyer’s agents here.
If you have any questions regarding bidding at Auction, feel free to speak to a djw property agent.