It’s a fact that many property investors tend to get little intimidated just with the thought of bidding at any real estate auction. They find these to be extremely stressful events and are concerned that they might pay far more than what they intended, only because they got caught up in all the excitement at the auction. But that only happens if you aren’t prepared.
you should invest a certain amount of time and effort into your pre-auction preparation, such as ensuring your finance is in order; and carefully checking all the prices and contract and then determining what your maximum price is. If you have done all this in advance, the auction then just becomes the venue where you action upon that decision that you have already made.
Some Useful Tips
Of course, it’s possible for you to make an offer before the auction; but it’s a sellers’ market today and you will risk paying far more than you need to. If you can, you should also arm yourself with information about any dirty trick a competing bidder might have up their sleeve, to purchase a property at an auction. Here is a basic and useful guide to real estate auctions:
- Arrive at the venue early and take time to survey the landscape. Check who else is already there and identify whether they look like they are serious bidders or just onlookers. The former will always be saying the right things and checking the contract etc.
- If you aren’t purchasing in your own name, you should organise your purchasing entity (like SMSF etc.) well in advance.
- You should get a pre-approval for finance; this will help you know what your budget is, and you can then attend the auction all ready to write the deposit cheque.
- Attend as many auctions as you can; that will help you get a “feel” of the atmosphere and understand the different strategies that people use while bidding.
- In particular, you should watch the auctioneer who would be selling the specific property you are interested in; this will give you a good idea about the words and techniques he commonly used.
- Conduct some research by inspecting various properties and see what their selling price is.
- You should know what the value of the property is as that will help you identify what the walkway price is- that would be highest price you’d be willing.
- Don’t share information about the price you’re prepared to pay for a property, with any real estate agents. Most of them are quite skilled at eking out this information from potential buyers and then use that to their benefit in a real estate auction.
- Don’t blame them for it, because that’s what their job is. But it’s best to keep all your cards close to your chest or you can end up compromising your negotiation leverage.
- Show your lawyer the contract; based on their suggestions, organise amendments as required.
Consider hiring the services of experienced real estate agents like us at Stefon Bertram. If you are looking to buy or sell real estate, we are the most reliable and reputed real estate agent in Sydney. Call us at this number- 0404 071 51.