If you tuned into the finale of The Block this week, you’ll know that auctions can be unpredictable.
From one property going for a jaw-dropping $1.65 million above its asking price, to another falling short of its reserve, it’s clear that auctions can be full of surprises. This is precisely why coming prepared is not just beneficial – it’s crucial. Proper preparation can mean the difference between clinching your dream home at a fair price and suffering buyer’s remorse from overpaying for a potential money pit. Here are our insider’s tips to help you make informed decisions and bid with confidence at auction:
1. Secure your finances
The first and most important step is getting your finances in order. This means getting pre-approval for your home loan so you know exactly what you can bid. Getting pre-approval can take from as little as two weeks to several months, so you can’t afford to begin shopping without knowing the limit of your budget. And remember, if you’re the winning bidder, you’ll have to stump up 10% of the agreed purchase price straight after the auction.
2. Set your limits
Mind you, borrowing capacity isn’t a bidding target. Your budget should reflect your lifestyle and future plans – whether that’s growing your family or navigating potential income changes – and the condition and features of the house itself. Set a maximum bid that’s comfortable for you and then stick to it, no matter how heated the auction gets.
3. Do your research
Knowledge is power in the world of auctions. Make sure you understand the value of the property and how it compares to recent sales in the area. Don’t just rely on a single inspection, either. Visit multiple times or arrange a private viewing to really get a feel for the place.
You should also invest in a building and pest inspection before the auction. Often, you can buy access to an existing report – just ask the agent. The goal here isn’t to find perfection, but to understand a property’s true worth to you.
4. Call in the legal team
Never underestimate the power of having a sharp conveyancer or solicitor on your side. Ask for a contract so they can scrutinise it for any potential issues and potentially help you negotiate better terms, such as a 5% deposit on auction day. Don’t leave this to the last minute – get the contract to them early so they have time to do their due diligence.
5. Register to bid
Before you can bid at an auction in NSW, you need to register. You can register with the selling agent any time prior to the auction, such as during an inspection, or before the auction. On the day, arrive early, bring ID, such as your driver’s license, and collect your bidder’s number (and maybe a paddle) from the agent. You’ll need to hold this up every time you make a bid (yes, just like in the movies!).
6. Get bidding!
When it comes to bidding, there really is no one-size-fits-all strategy. Every single auction is unique, and the same tactic won’t work every time. The key is to set a limit on what you are willing and able to pay for a particular property and not go beyond it. If you miss out, there will be other properties, but overspending can lead to long-term financial strain.
Preparing for an auction is about doing your homework, understanding your limits, and staying cool under pressure. With these strategies, you’ll be well-equipped to raise your paddle with confidence.
If you’re looking for more personalised advice or answers to your auction-related questions, don’t hesitate to reach out using the contact details below.
The information referred to in this article was obtained from publicly accessible sources including Fair Trading NSW and ABC News. The information provided in this blog post is for general guidance only and should not be taken as personal advice. We do not accept any liability for any errors or omissions.
Prudential Real Estate Campbelltown | (02) 4628 0033 | [email protected]
Prudential Real Estate Liverpool | (02) 9822 5999 | [email protected]
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | [email protected]
Prudential Real Estate Narellan | (02) 4624 4400 | [email protected]