Do you know how to bid at an auction? Read through for some helpful tips. Photo: Independent Property Group.
Property auctions can be stressful, especially if you have your heart set on a particular home. Being prepared is really important, not only to put you in the best position for bidding, but also so you’re aware of your obligations if you are the successful bidder. We spoke to Phil Smith from Independent to find out how to bid at an auction, from start to finish.
1. Get your ducks in a row before the auction date
“The first step is obviously to view the property,” Phil says. “If you like it, then make sure you receive a copy of the contract, and also register for the auction with the agent. Once you know when the auction is, you need to ensure your finance is approved and ready to go. Ideally you will have a pre approval in place from your lender, but you’ll also need to notify them of your intention to bid, and be ready to pay the deposit on the day if you’re the successful bidder.”
2. Due diligence is key
“Due diligence is important, so as well as doing a thorough read of any supplied building investigation reports, it’s important to use this time to have the contract reviewed by your lawyer,” Phil says.
Independent Property Group sales consultant Phil Smith. Photo: Independent Property Group.
3. Attend other auctions so you know what to expect
“I always encourage first time bidders to go along to other auctions to just see how they work, and get the lay of the land,” Phil says. There’s nothing worse than being confused by the process on the day when you’re already nervous about bidding!”
4. Have a final walk through of the property
Remember, there are two types of auctions – onsite and offsite. If you’re attending an offsite auction, which is typically held at an agency where multiple properties may be auctioned during one event, make sure you know what you’re bidding on, and that you’ve had a final look at the property ahead of time. As an agent, I’ll always make time to take a prospective bidder through the property again, even if no viewings are scheduled,” Phil says.
If it’s an onsite auction, the property will typically be open for 30 minutes prior to the auction start time. It’s a good idea to do another walk through, ask any final questions of the agent, and register to bid with plenty of time.
5. Be confident in your budget, and remember your obligations
If you are the successful bidder at an auction, you will need to be prepared to put down a deposit and exchange contracts on the day. That’s why it’s really important that you’ve thoroughly investigated the property, have your financing prepared, and are comfortable with the final amount.
There is also the opportunity to put an early offer in on a property that is listed for auction but remember that if you do that, you’ll be doing so under auction conditions, so the timeframes will be as short and the commitment is immediate.
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