So you have decided to attend and bid at an auction property. Here are my five top tips to stay ahead of the crucial 15 minutes or so of action…
1. Research, research and do more research
This cannot be overstressed – but I will. I believe your money on the day of the auction must be represented by data & researched evidence that includes:
similar properties sold in a radius of 1km over the last 3-6 months
the potential of growth of the land and its value in 3-5 years to come
rental yield returns average of the area
easements/encumbrances affecting the land
Present your CMA‘s (comparative market analysis) and any questions on property well ahead of auction day via an agent representative.
2. Forget body language, just be human.
“Oh, here’s another post telling me to stand to the left of the auctioneer,” you thought?
Well stop assuming and start by saying hello. The auctioneer is present on the day to guide you towards a sale, prior to or after the fall of the hammer. If your finance & settlement terms are approved in advance then the only thing stopping you is the strength of your bid.
Talk to the agent and the auctioneer and ask for help in any way to meet the seller’s terms under reasonable conditions, and may the best terms win.
3. Bid boldly, and confidently
More often than not, an auctioneer announces the level of an advancing bid.
In situations where there are multiple bidders, it would be wise to swing the ball out of the park fast & early.
This will ensure your last 4 – 6 weeks of research culminates in victory and champagne showers instead of wondering if the next $10,000 – 25,000 would have bought you the key to that home you visited and now it’s back to reiwa.com for yet more home opens.
4. Have a limit
This may sound as simple as not trying your luck at roulette for just ‘one more’ spin when you’re on a winning streak.
As the auctions can often be as combative as a tennis match, it’s important to throw emotions out the window & plan a price ceiling.
An auction can be paused at any given time – with due notice to other bidders of course. So if you need a time out to consider the value of your next bid/investment, ask for it.
As mentioned above, the auctioneer’s role is to facilitate your bids as you present them on auction day.
5. Have a strategy and stick to it
If you miss this opportunity, the next one is always going to present itself. So, how about we start preparing from this article henceforth?
Here’s an auction checklist prior to bidding:
Proof of ID
Proof of finance within price guide
10% deposit of maximum price guide within the daily limit of your nominated bank
CMA of properties in 1km radius
Rental yield & outgoings
Building & pest pre-purchase inspection
Settlement terms approved by agent & auctioneer
Clear maximum limit of purchase price
Lots of coffee on the day of the auction
We hope the above helps guide your investment from research to purchase, and here’s to seeing you at the next auction when it’s Hammer Time!
First Published on The Property Tribune, see post here