This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
There are many things you must know and understand before diving into this high-stakes, high-stress process.
The team at Bliss Conveyancing has put together some of our best tips. You’ll find one that is often overlooked – but not by you – after you read this.
1. Have your finances in order
It is critical to know that you actually have the money to pay for the house before you even contemplate bidding. If you are obtaining finance, ensure you have pre-approval from your lender and have your deposit ready (usually 10% of the purchase price).
2. Have your contract checked by a licensed conveyancer
Behind the scenes of any property purchase, there are legal considerations you’ll want sorted before the auction.
Obtain a copy of the contract before the auction and have it reviewed by your conveyancer. They will:
- Highlight any red flags and explain potential risks associated with the property.
- Advise on legal bargaining tools you can use during the auction, such as longer settlement periods, reduced deposits, or additional terms/conditions.
3. Make sure you have a professional building report
An auction sale is legally binding. You must know about any potential issues with the home before the auction starts. Relying on gut feel alone is very risky. No matter how shiny or new the home seems, be sure you know what you’re buying.
4. Check more than just the house condition
This is one of our favorite tips that is often overlooked. Open houses allow potential buyers to view the property, but you should not stop there.
If buying an investment property, stake out the neighbourhood. Walk past at different times of the day to gauge noise levels, lighting, and traffic. Real estate agents often show the property at its best times, but seeing it at different times may reveal surprises.
5. Register to bid
Before the auction, you need to register with the selling agent. This can be done when inspecting the property or on the auction day.
Bring an ID, such as a government-issued card or financial institution card showing your name and address (e.g., license, photocard, vehicle registration). Don’t forget these on the day.
6. Don’t get caught up in the heat of the moment
A house auction is fast-paced, typically about fifteen minutes. Once the hammer falls, the sale is final; the contracts are unconditional and binding. Stay calm and in control of your bidding despite the adrenaline and competition.
If you don’t win, treat it as a learning experience. Remember, a better home is waiting for you. Getting swept away in the heat of the moment can land you in trouble beyond what any house is worth.
7. Have a bidding limit and stick to it
Prepare your bidding strategy before auction day. Set a limit so you don’t overbid emotionally. Auctions have a history of people bidding themselves into financial difficulty because emotions got the better of them.
Never exceed your borrowing capacity. However, don’t set your budget too low, hoping to snag a bargain. This can lead to regret when someone else buys the home you could have afforded.
