How to prepare for a house auction?
If you are in the property market right now, chances are that you will have to go to a property auction. While at LoanDolphin we do Home Loan Auctions, we thought it’s important to share how you should be prepared for when you are going to that property auction this weekend.
Before the auction
- Arrange your finance
It’s imperative that you have your finance organised before you go to the auction. This step will help you know the maximum limit you can borrow. Remember you can use our services to create a home loan auction with your requirements to eliminate the pain of negotiating, filling up different forms, wasting time and money in the process of looking for the most suitable mortgage.
Don’t underestimate the importance of going to a few auctions and checking them out. This will calm your nerves when you are taking part in an auction.
- Research – property report, suburb, neighbourhood
Don’t be impulsive. This is a big purchase. Research into the property, the suburb, and the area.
During the auction
- Remember to register
If you’re bidding in New South Wales, Queensland or Victoria, you need to register to bid on auction day. You will need some sort of identification such as your licence, vehicle registration papers or council rates notice. But if you’re in South Australia, Tasmania, the Northern Territory or Western Australia you don’t have to worry about registering.
Remember that registering to bid doesn’t mean you have to bid; you are free to exercise the right to place any bids. You can register with the real estate agent beforehand or on the day of the auction.
- Wait till the property is “on the market.”
Before making a bid wait till the property is “on the market”. On the market means that the bids have reached the reserve price or the vendor (seller) is prepared to sell at the current bid and the property will be sold.
- Bid with confidence
This is a psychological tip. Make sure that you are being heard loud and clear. Also, you don’t have to go with the auctioneer’s suggested bid. If the auctioneer is asking for $10,000, you can suggest $5,000 increments.
- Don’t step over the pre-approved limit
It’s imperative that you do not step over the pre-approval limit. You know how much your pre-approval limits are, so stick to it. If you feel that you are going to go above the limit, we recommend bringing a friend along who will stop you from stepping over the limit.
After the auction
- If you were successful
If you were the highest bidder and the property was declared “on the market”, you’ve bought yourself a property so congratulations! The agent will take you through the steps and finalise the paperwork. You’ll have to hand over the deposit at this point.
When the real-estate agent hands over the sale of contract, don’t be compelled to sign this immediately. It’s recommended that you have a solicitor look over the terms and conditions to make sure that everything is alright. This will give you some peace of mind.
- If you weren’t successful
In the event where the property price did not reach the reserve price, and it’s “passed in” you are then in a position to negotiate. If you were the highest bidder, you have the first right to refuse the vendor’s reserve price. But you still stand a chance even if you weren’t the highest bidder. Talk to the real-estate agent and make your interest known.
For more information about auction rules and regulations, visit the fair trading or consumer affairs authority in your state or territory.
Remember that LoanDolphin is here to help you connect with a banker or broker who is willing to help you spend less on your mortgage. We get the banks and brokers to fight for your home loan through our open, transparent and unbiased platform.