Tips to buying at auction
- Posted in Getting Started
You have your heart set on your dream home, but others probably do too. Auction day is up there when it comes to milestones in a person’s life, full of excitement and anxiety.
Auctioning is exciting but can also be stressful. You can help combat this by preparing yourself properly by putting in place a rigorous plan that includes doing your homework, setting yourself a strict financial limit and understanding that if you’re not successful first go, a brighter opportunity may be around the corner.
Here’s a checklist with key tips and strategies on how to prepare for buying at auction this spring.
Set your budget
You may know how much you can afford in terms of fortnightly or monthly repayments but don’t forget there are other costs. These can include:
- Loan application fees.
- Building inspection fee.
- Government fees such as stamp duty.
- Solicitor fees and more.
List essential features you require in your property
Making a list will help you avoid getting carried away and buying something that looks great but doesn’t meet your needs. It’s also a good idea to make a wish list of all the desired but non-essential features you would like, so that these can be factored into your decision-making when you find them in a property you can afford.
Secure your finance
Talk to your lender or employ the services of a mortgage broker. Ask lots of questions so that you are well informed. You’ll need to figure out the type of loan that best suits your needs. For instance, will you lock in a fixed interest loan or a variable one? If you are a first home owner, be sure to investigate the current government grants that may be available to you.
Research the area
Nosing around the area in which you want to buy is non-negotiable when preparing for auction. What are the local amenities? How convenient is public transport? How noisy is the street? And what have recent properties in that area sold for? You can use online tools such as Pepper’s ‘Where can I buy?’ calculator, to help you get started.
Learn how auctions work
When you are ready to start looking for a property, invest the time in attending as many open-for-inspections and auctions as you can. Watch the dynamic between auctioneers and bidders. This will help you to become familiar with the auction process and remove some of the uncertainty when you start to participate. You will also gain a more accurate idea of what properties are selling for in your desired area.
Auctions are full of energy and can go by in an instant, making it easy to get carried away. Keep your budget in mind and make concrete limits for your finances before you get to the auction. Also, take a friend or family member with you for support – they may be a voice of reason when the bidding gets going.
Building inspection is a must
When you find the right property make the effort to get a building inspection done. An experienced professional will undertake a thorough examination of all accessible areas of the house or apartment to determine its overall structural condition and pick up any defects. The inspection and report may set you back a few hundred dollars, but its money well spent and could highlight any issues or potential expenses required in relation to the property.
Finally, don’t forget to read the contract of sale, including information about rates, local government building restrictions and easements – if any. We recommend that you speak to your conveyancer or lawyer to check the fine print and get the best advice on how to proceed.