Buying a home at auction can be “daunting and emotional,” says HSBC Australia in its website, but if handled correctly, it can be a rewarding undertaking.
According to HSBC, “auction is an ever-popular method of selling property, particularly when the market is strong” because sellers often get a good price for their homes.
But first things first, before going to auction, make sure you have the authority to bid, as regulations differ from state to state. Check laws, or consult your real estate agent, or the Real Estate Institute for specific rules.
Now that you got the authorization, keep these tips in mind for an enjoyable and fulfilling bidding experience.
Inspect the property—it would be worth driving over a few times to go over the house to look at every nook and cranny to make sure you really want it
Get legal advice—prepare for auction by having your solicitor go over all the pertinent legal documents related to the sale of the property
Prepare your bank account—make sure your finances are ready before auction day. Contact your bank for finance approval so you’ll know your borrowing power and set limits come bidding time
Keep your cool—you’ll need a clear head to make as major a decision as competing for a home you set your heart on
Know when to stop—be aware of your financial limit and stick to it
If you are lucky, and the property you were bidding for is “knocked down” to you, be prepared to sign a contract and make a deposit, which is usually 10% of the purchase price. Then, take out insurance to protect your interest in the property.
For more information on the auction process, you may get in touch with your state Department of Fair Trading.