The majority of Melbourne property is sold at auction. To be successful you will need to be armed with as much information as possible. The below sets out my 7 key steps that will put you in a strong position come auction day.
1. Bring In The Professionals
Property is most likely your biggest financial commitment you will ever make. Do all that is required to ensure you don’t run into avoidable hazards. When you are super keen on a property, get a building inspection and engage a solicitor to review the contract of sale and provide advice around how to sign the contract correctly.
2. Obtain Pre-Approval
It is scary to think that people go and purchase a property without formal pre-approval from a lender. This is a MUST as there is never a guarantee that you will be eligible for a home loan.
3. Understand Auction Rules
Some auctions will require you to register to bid. Ensure you ask the Agent well before auction day if there is anything you need to know about the auction process.
4. Do The Research
The last thing anyone wants is to be successful at auction only to find out they have overpaid. You need to critically analyse the property and its surrounds in an unemotional business-like manner. Good mortgage brokers will have access to property reports showing similar sales in the area and may know of any future developments that will add or detract value from the property you’re keen on.
5. Know Your Limits
Pre-approval will give you a maximum purchase price, however that doesn’t mean that every property you look at will be worth the same. Place a maximum value on the property you’re bidding on and stick to it. Auctions are so popular with vendors as the hype can attract foolish bids… don’t let it be you!
6. Auction Day Tips
Auctions are a show, so you have to perform. Here are some ideas to try and spook other bidders on the day:
- Have direct line of sight to other bidders and the auctioneer. Try and stand near the front. Don’t lean on cars / fences. Look like your there to buy and nothing will hold you back
- Bid confidently and loudly. You want to appear to have bottomless pockets. Always counter a bid against you quickly. As long as the property is below your limit, you should act like you have no limit
- If you are a younger buyer, ask an older family member or friend to bid on your behalf. They can make it look like it’s their 10th investment property and that price isn’t an issue
- Dress nicely
- Don’t seek guidance from your support crew during the auction, it shows you are a novice
7. Get Used To Auctions
You should attend auctions in the area you are keen to buy in to scope out the bidders and the way the auctions work. You wouldn’t play a grand final without going to training a few times, so why should spending half a million plus be any different. Try and pick up on any tactics that seem to work and take notes… one day it will be your turn to shine!