Buying property at auction: The basics

By the resi financial blog team, 18 October 2013

What do I need to know about house auctions

The property market in Australia is beginning to head into a recovery, which could be fantastic news for anyone looking to purchase their first home. Most people purchase property at some point in their lives and the current market could be ripe for sealing a fantastic real estate deal.

However, selling property through auction is becoming increasingly popular with many vendors and the process can be somewhat intimidating for anyone unversed in the method. Taking the time to understand the various aspects of an auction will help you to keep your nerve and succeed in your property endeavours.

When a property goes up for auction, the basic premise is that of competition. Various buyers will place their bids in an attempt to win over the others and secure the home by offering the highest amount of money.

Understandably, the atmosphere can be fairly heavy. It could be wise to attend some auctions in preparation, in order to gauge the feeling and see how the proceedings go down.

Once you've found a property you could see yourself living in, the next step is to approach a lender and seek a home loan that suits your needs. Discussing your options with a financial expert will help you to find a mortgage that fulfills your own requirements.

Getting a home loan pre approval is also recommended. Often, vendors and their selling agents will want to get the deal underway as soon as possible after the auction concludes.

By having this pre approval, you put yourself in a good position to act with speed and finalise the proceedings efficiently, without the fear of losing out on your dream property due to being unprepared.

Finally, make sure you create a spending limit for yourself and stick to it. The last thing you want to do is to secure a home, only to find yourself unable to comfortably make repayments in the future.

Categories: Home Loans, Personal Finance