If you’re a first home buyer looking into purchasing real estate in Australia, chances are you’ll come up against an auction at one point or another.
Auctions are an increasingly popular way for people to sell their homes across the nation, and can seem incredibly daunting to the uninitiated.
However, knowledge can help to mitigate any major fears you may have about going into such a competitive atmosphere.
Plus, there are a number of things you can do before heading into the auction that will help you to keep your cool and, hopefully, successfully bid on your dream home.
Going along to some auctions beforehand is recommended. Hang out around the back and check out the proceedings without the stress of having to actively participate.
This will allow you to take in all the different things happening around the place and familiarise yourself with the sights and sounds of an action-packed auction.
Organising your finances is also an important part of approaching an auction with confidence. Get in contact with a mortgage broker and take the time to figure out your borrowing capacity.
Understanding how much you can physically borrow towards your home allows you to narrow down your property search parameters, and when you find the perfect place, it gives you a basic bidding guide as well.
Following this, having your home loan pre-approved can be the difference between successfully getting your home and missing out by a narrow margin.
Often, the deal will be sealed and secured within minutes of the auction finishing. Being able to approach the vendor and instantly seal the deal will work in your favour.
Furthermore, deciding on the type of home loan you will be taking out is essential. Understanding the different types of loan, and which one suits you and your circumstances, will go a long way toward helping you cope with the huge undertaking of purchasing property.
In order to successfully organise your borrowing capacity and home loan pre-approval, however, you may need to do some market investigation. Researching recent sales trends in the area you’re looking will give you a fair idea about the values of the homes.
Furthermore, a real estate agent will be able to provide you with all the recent data – including auction clearance rates, current popular areas, future hotspots and a whole host of other information.
This will be crucial when it comes to deciding what is within your price range, and whether or not your expectations are realistic for your price range or not.
When it comes to actually bidding, the most crucial thing to remember is your upward limit. Making sure you decide on the most you’re willing to spend, and then sticking to that like glue, will help to ensure that you keep yourself financially safe.
After all, there is nothing worse than overbidding for a home and finding yourself unable to make repayments. It’s better to let a house go than being stuck with an unpayable fee.
The bidding process is relatively simple. All buyers who express interest can place bids, which are all binding. The person who is willing to bet the most wins.
The only time this isn’t the case is when the house doesn’t reach reserve. In this situation, the seller could approach the highest bidder and make them an offer, or the bidding could start again.
This is the basic rundown of the auction process – however, getting in contact with a real estate professional will help you to seriously figure out everything you need to be successful at an auction.