Auctions can be scary and mysterious especially if you’re a first home buyer or have never been to an auction before. On the other hand it can can be a fun experience and has the potential to result in a great purchase. (I am biased as an Auctioneer)
As a buyer some ideas to consider for buying a home at auction.
1. Learn about the Auction Process
Make the time to attend other auctions. Listen and watch the process and become familiar with how it works. Make an effort to go and talk to an Auctioneer most are very helpful and will explain the process to you. You can ask a sales person however remember that not all sales people are familiar with the Auction process This will allow you to form a better understanding of the local market and to get comfortable with the auction process.
2. 100% Know you Limit
I have called many Auctions and you know that the buyer is going over their limit. Sometimes it is the fear of missing out on the dream home or the competition to get the home drives them emotionally. The end result is normally a happy buyer outbidding someone else with the knowledge that you are at the market level as someone else sees the same value as you.
It is easy to get caught up in the pace of an auction and the desire to win. To stop yourself from the excitement and temptation of getting caught up SET A BUDGET LIMIT before you start. Know your upper limit and be strict with yourself on stopping at that limit. BUT!!! Don’t be afraid to have a backup plan of some funds set aside. What I mean by this is set your limit then be conscious that the other buyer/bidder might only have $1000 left on their limit. You will not be happy to find out if you had an extra $2000/$3000 free, and that was all that was needed to get your dream home..
3. Educate Yourself
Make sure you have done your due diligence on the property itself. Make sure you have a building and pest inspection in hand and all your finances prepared.
Contracts for Auctions are always prepared in advance make sure you get a copy and look over the conditions. Prior to Auction if there are conditions that you would like changed talk to the Sales Team or the Auctioneer there maybe an opportunity to have some terms changed. However if they do get changed they must be the same for all buyers/bidders on the day of the auction.
Auctions are a great way to buy and to sell. Just prepare yourself.