There are a number of steps to help you get ready to buy a home under the hammer.
Step one when buying any property, whether or not it’s going to auction, is to do your research. Be sure to spend time getting to know recent prices for properties similar to the type you want, in the area where you want to buy.
If you’re a first-timer, the auction process itself might seem daunting. Make yourself familiar with it by attending at least a half a dozen auctions. That way, you’ll be a lot more comfortable when the day comes for you to make a bid.
When you’ve found a home you want to bid on, ask the agent for the name of the person who will be auctioning the property. Then find out which other homes the auctioneer is selling and go and watch him or her in action at another auction. Knowing the auctioneer’s style and what to expect will give you a head start on the other bidders on auction day.
As there is no cooling-off period for a property that sells under the hammer, you need to have a pest and building report completed prior to auction. Also get your solicitor to run his or her eye over the contract and complete the strata searches to ensure everything’s in order.
As auction day approaches, it’s a good idea to gauge the level of interest in the property so you have a sense of the number of likely bidders. You could do this by asking the agent how many contracts have been issued.
Finally, it’s wise to set yourself a spending limit to prevent over-committing yourself financially on auction day. Do the maths so you go in with a clear understanding of how much you are prepared to pay. Your limit might be predetermined by the amount your lender is prepared to give you, so it’s advisable to have a pre-approved mortgage finalised before the auction.