1. Be approved
Make sure that your finance has been approved before attending any auction. This not only gives you a firm picture of what you have to spend, it also guarantees that you’ll be able to come up with the cash if your bid is accepted. A sale made at auction is binding so you’ll need to be sure you have the financing behind you.
2. Know your limit
It is essential that you set a maximum amount that you are prepared to spend before you start bidding at an auction. Auctions can easily become heated and it’s easy to be swept up in a bidding war, resulting in parting with more money than you’ve bargained for. If the price goes above your max, pull the pin.
3. 10 per cent deposit
Make sure that you’ve got a 10 per cent deposit that you can access on the day, as this will need to be provided once the deal is done.
4. Consult a lawyer
Ensure that you understand all the legal implications and requirements of an auction purchase before you bid and that you understand all the conditions in the contract. Once you’ve agreed to buy at auction, there’s no turning back.
5. What’s it worth?
Make sure you have a clear picture of the property’s value before you go to an auction. Invest in an independent qualified valuer to get an appraisal of the property’s true worth before you place a bid.
6. Befriend the agent
It is well worth getting to know the selling agent prior to auction to find out as much as possible about the auction process. While this will not result in getting a better price for the property, it will help show that you are a serious buyer.