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When attending an auction, expect the quoted price to be at least 20% and as much as 50% below what the property will sell for. It is the intention of auctioneers to get as many people to the auction as possible, to tempt you to spend more than you intended, and to increase the perceived demand for the property.
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Always make repeated visits to the property you want to buy. Preferably go with the builder that you might use for any work that needs doing.
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Always set a limit on how much you are prepared to bid, and do not even think about exceeding it. If you can't resist the temptation to keep going, simply walk out of the room.
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Pay for a full survey - even though you may not end up winning the auction. It could save you a great deal of pain if you uncover hidden horrors like subsidence, or structural problems.
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On the morning of the auction, check that the property is still available. They can be withdrawn or sold privately at the eleventh hour.
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If you are desperate for the property you can make an offer before the auction. Most vendors and auctioneers will happily accept if it is high enough.
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Before you start bidding on any property, have a realistic understanding of its true market value, by looking at similar properties in the area. For a fee, your lending institution or a registered valuer can give an opinion of value.
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Practice. Attend as many auctions as possible to familiarise yourself with the procedures, rules and regulations and take special note of the strategies implemented by the winning bidder.
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Have your finances in order. The winning bid at an auction is a binding contract and, if you are successful, your finances must be in order before auction day.
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Properties sold by mortgagees foreclosing or by councils recovering unpaid rates can be much, much lower than the market price. This is good for the buyer, but bad for the one trying to repay the debt. You might not want to own such a property.
kellyjones00 (593)
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