Buying at auction
Property auctions is Australia have certainly gone through some changes over the last twelve months and the data suggests that rate of sale at auction has dropped. Despite this, auctions are still a key way Australians buy houses, so here are some simple tips to help you navigate the process.
The most important thing about buying at auction is not getting caught up in the emotion of it all. An auction is exciting and nerve-wracking and it is easy to spend more than you intended. Before the auction you need to have a specific plan of attack which will include your absolute limit – this is the price you won’t go past, no matter what. Firmly fixing this price will ensure you won’t get caught up the adrenalin of a bidding war.
Of course, knowing your limit involves having an idea of the value of the property. The real estate agent will provide a range, but sometimes this is not a great indication (even though it should be). Attend other auctions in the area, comparing the properties to get an understanding of the market price. This should give an indication if your limit is a sensible one in terms of the area. Likewise, it should give an indication of what it is possible to buy – you don’t want to spend more than you need.
If buying at auction is something that you are really nervous about, it is possible to have someone attend the auction and bid on your behalf. This could be a relative friend, but it should be someone who is not new to the auction process and you trust to follow your instructions on the day. If you go down this path, you will need to make the call earlier enough to allow you to organise a limited Power of Attorney for your proxy bidder.
Just as you would if buying through private sale, you need to have examined the Section 32 and contract of sale. Getting legal advice may be necessary at this time, as this will ensure that everything is as it should be.
One other tip – the limit you have decided on should not be shared with the real estate agent. While they will be helpful, ultimately they want the best commission – if they know how much you have to spend, they could use this to their advantage.
Buying at auction isn’t for everyone, and there are buyer’s advocates that provide a service that can take all the stress of property purchase. Accrue Real Estate provide access to a diverse range of properties across Melbourne and could help you meet your property goals.