Smart strategies at auction
Date Posted: Dec, 2013
Purchasing property at auction can be equal parts exciting and overwhelming, especially for newcomers to the process. However, there are some strategies that can help you come out on top when buying a house in Australia.
Do your homework
There's no reason to walk into an auction blind. While you may not know the reserve price of a specific property – the minimum price the seller is willing to accept – you can do research on the home and the area it's in to come up with a general idea of what it's worth.
This will help you make more strategic bids during the auction, and prevent you from spending too much.
Set a limit
Auctions can be fun, especially when competing with other passionate buyers. However, this fun can quickly turn to trouble if you find yourself getting into a bidding war with someone else.
While it can be tempting to keep yourself in the game by one-upping other bidders, keep in mind that you're here to purchase a property, not needlessly lose money.
Before beginning the process, determine how much you're willing to spend and stick to it. This will help keep you from overspending on a home if you get caught up in the auction atmosphere. I've been at countless auctions where emotional home buyers are easily led by the auctioneer or pestering agents to make another few bids well over their limit.
Utilise professional help
Even if you have experience at property auctions, there are professionals who are more knowledgeable. Fortunately, these same professionals can assist you with everything from offering advice to bidding in your place.
For instance, a buyers agent can not only help you find homes and negotiate with the sellers, they can also bid for you at auction. A buyers agent is emotionally detached from the process and can read the body language of the other buyers. They know how to make the right moves at auction and whether to bid fast or slow or in large or small increments to give you the competitive edge.
If you're unfamiliar with the auction process and worried you might not come out on top, working with an experienced buyers agent can be a great strategy.