Are you considering purchasing a home at an auction? If so, it’s essential that you keep these 10 tips in mind before signing on the dotted line.
1. Do Extensive Research
Before placing your first bid, visit other auctions to find out how they work and to see what other properties in the area are selling for on auction. Once you’ve done this, arrive at the auction knowing what the highest price is that you will be prepared to pay for the property in question.
2. Use a Professional Bidder
If you aren’t confident enough to do your own bidding, hiring a professional to do so on your behalf can be highly beneficial – especially if your chosen bidder is well-known and has a reputation for winning auctions.
3. Arrive Early
In the event that you are going to be doing your own bidding, be sure to arrive at the auction early. This will enable you to see who else is there and whether they look like serious bidders or not (if they are, they will have asked to see the contract, for instance).
4. Call out your Bid in Full
When placing your bid, ensure that you call out the full amount that you intend paying. For example, many people only call out the amount that they are willing to increase the bid by, such as $2,000 or $5,000. However, research has shown that when you call out the full amount that you are willing to pay for the property ($650,000 for example), it will make other bidders realise how expensive the bidding has got and cause many of them to back off.
5. Bid As Early or As Late as Possible
When planning your bidding strategy, industry experts state that bidding as early as possible in the auction can help show fellow bidders that you’re serious about winning. However, expert opinion also notes that if you hold back and bid as close to the end as possible, it can indicate that you’re more comfortable with paying a higher price than your competition is.
6. Know your Limit
It’s very easy to get caught up in the heat of the moment during an auction, which could result in you paying out more than you had initially budgeted for. Consider taking someone with you to the auction and let them know how much you’re able to spend so that they can remind you along the way.
7. Bid with Confidence
Bidding with confidence not only makes you feel better throughout the auction process; it gives competitors the idea that you’d be willing to pay whatever price is asked for the property in question as well.
8. Know that you may Miss Out
If you’ve researched what the value of the property on auction is and bids exceed this amount, be prepared to walk away.
9. Obtain Mortgage Pre-Approval
This may seem like a drag, but it will enable you to determine exactly how much you will be able to afford to spend on a home.
10. Have a Building Inspection Performed
Before purchasing an auction property, it’s essential that you have a thorough home inspection performed. This will help determine whether it is as much of a bargain as you thought it would be or not.
Keeping these tips in mind when attending a house auction will help ensure you get the best deal possible – even if you have to attend a few auctions before this happens.
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