How to win a home on auction day

By the resi financial blog team, 28 October 2014

How to win a house at an auction

Of the two main ways of buying a property – at auction or privately – the one that causes the most stress is buying at auction. So how can you make sure that you get the property you want when it comes to the big day?
 
Landing your dream property starts well before the day it goes to auction. Make sure you read the contract of sale carefully, especially the legal obligations. If there is anything there that you’d like changed, it needs to be discussed and agreed upon before auction day.
 
If you’ve never bid at an auction, make sure you understand the rules. Better still, go with a friend who does have experience. If you can’t find someone, then attend a few auctions in your area to see how they are run and what terminology is used.
 
On the day, before you even raise your hand to bid, make sure you know what your maximum limit is. Many properties these days go way above their reserve price and it’s easy to get caught up in the excitement. It’s also too easy to convince yourself that it’s your dream house and you “must” have it.
 
If you’re lucky enough to be the winning bidder, make sure you’ve brought financing for the deposit - usually a cheque - so if you don’t have a cheque book, investigate other options. At auction, you are expected to pay the deposit immediately.
 
If the property is passed-in because it didn’t meet its reserve, have a plan B that you can put into action to help secure it. One way is to form a strong relationship with the selling agent. This way, they’ll know you’re a genuine buyer and will be more likely to negotiate with you.
 
Also try and hold the highest bid before it’s passed in. This gives you greater control when it comes to post-auction negotiations.
e big day?

Categories: auctions, Property