Participating in a house auction can be an exhilarating experience; however, it necessitates meticulous preparation to secure a favorable result. Over the past few months, numerous members have engaged in the auction process with success.
In this article, I will guide you through the essential steps to take before bidding on your first home at an auction.
STEP 1: RESEARCH AND DUE DILIGENCE
A. PROPERTY INSPECTION
- Conduct a thorough inspection of the property to identify any defects or needed repairs.
- Check for any signs of pest or water damage.
- Organise a pest and building inspection (these can cost up to $1,000 and are recommended)
B. MARKET VALUE
- Research the property's market value using online tools or obtain a FREE property report, which your mortgage broker (me) will provide to you.
- Set a realistic bidding limit based on your findings.
STEP 2: FINANCING AND BUDGETING
A. GET PRE-APPROVAL
- Stay organised and secure a pre-approved home loan beforehand (I can assist with this), ensuring you have the confidence to make an offer.
B. SET A BUDGET
- Determine your maximum bidding price, including costs like stamp duty and legal fees.
- Consider additional expenses like renovations or repairs.
STEP 3: LEGAL AND PROFESSIONAL ADVICE
A. ENGAGE A SOLICITOR/CONVEYANCER
- Consult with a solicitor/conveyancer in property law.
- Review the contract of sale and auction terms.
- Don't hesitate to ask questions or seek clarification.
STEP 4: AUCTION DAY PREPARATION
A. REGISTER TO BID
- Arrive early to register for the auction.
- Bring required identification and proof of finances.
B. SET A BIDDING STRATEGY
- Decide on your bidding approach, such as setting a maximum bid or bidding incrementally.
- Stay calm and focused during the auction.
CONCLUSION
Preparing for a house auction requires careful research, due diligence, and strategic planning. By following these steps, you'll be well-equipped to navigate the auction process with confidence and secure your dream home.
Additional Tips
- Don't get caught up in the excitement of the auction – stick to your budget.
- Consider attending a few auctions as an observer to gain experience.
- Be prepared for unexpected situations, like a failed bid or post-auction negotiations (this is what happened to my last 2 x members)
- Reach out to me if you have any questions
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