Buying at Auction
With over 80% of Melbourne properties offered for sale by auction, it is inevitable that you will come across the home of your dreams for sale by this method.
Here are some tips that will assist you when buying at auction:
First and foremost, it is recommended that you organise your finances prior to considering bidding. Set yourself a realistic limit. Remember when you do buy at auction, it’s final with no cooling off period.
- Try to attend a few auctions beforehand as a spectator. Note where the genuine bidders stand and when they start to bid.
- When it's your turn to actually bid at an auction, ensure that you have a plan including knowing when to commence bidding and at what price point you should stop.
- Stand where the auctioneer can see you. Make your bids clear by announcing them and raising your hand.
- Be strategic when bidding. Watch the competition and note how many people are bidding and how quickly the bids are rising. It may be preferable to wait until the auctioneer has conferred with the vendor before offering a bid, or bid aggressively and let your competitors know you mean business.
- As soon as the auctioneer declares the property is ‘on the market’, waste no time in making your move. Bid confidently and quickly but stop when you’ve reached your limit.
- The highest bidder is in the driving seat whether the hammer falls or the property is passed in. If this happens, it is the highest bidder who has the first right to negotiate so if you are genuinely interested in the property, make sure the highest bidder is you.
- If you find the auction process daunting or you don’t feel you will stay within your limits, have an experienced bidder or friend to bid on your behalf.
Finally, do your research. Know what comparative properties are selling for in the area. In these times, it’s also good to know a bit of history about the suburb and current property values so you don’t get caught out overstretching your limit.