How to Bid Confidently at Auction May 31, 2021 | Blog When property markets are hot, it’s very common to see a lot of properties listed to sell via the auction process. In the current market, we are seeing very strong auction clearance rates that are regularly above 80% in both Sydney and Melbourne, which is a clear sign of a seller’s market. For the most part, selling at auction is the best way for a vendor to get the very best price possible. Auctions encourage competition and can also be extremely emotionally charged events, meaning there is a chance a property will sell for more than it was initially valued at. If you’re a buyer at an auction, it can be a daunting process. However, there are a number of key steps you can take to make sure you can bid confidently and successfully. Be Prepared The first thing you should do, regardless of whether you intend to buy at auction, is to seek pre-approval through your mortgage broker. When you have a pre-approval in place, you will have a very clear idea of what your budget looks like and it will ensure that you don’t overextend yourself. While you’re going through the pre-approval process, you’ll also likely be able to organize the correct structure in which to purchase the property. Do Your Research The biggest trap for buyers at auction is not understanding what the property is actually worth and relying on the sales agent’s price guide. The goal of a sales agent is to get the maximum possible price for their client, the vendor. To do that, they will try and attract as many people to bid at the auction as possible. While you cannot control the final price the house sells for, you can control how you go about your research. The best way to understand what a property might sell for is to use comparable sales data. These days this information is available on a number of real estate portals, and you can easily search for sales that have occurred in the previous six months in a particular suburb. Try and identify comparable properties in terms of the type of building, age and land component. Many people leave an auction disappointed because they simply have incorrect expectations heading into the auction. While we often hear stories of properties selling for huge sums of money over and above the price guide figures, this can be very misleading. If you’re confident in your numbers, you can also put in an offer prior to auction. Be Ready at Auction When the time comes for the auction, make sure you arrive early and assess the people that you will potentially be bidding against. Just because there is a large crowd, it doesn’t mean that all the people there will be buyers, as neighbours always like to see how the property market is performing in their area. If you’ve done your research as suggested, you should be confident in bidding strongly and not going over your pre-determined limit. People make mistakes at an auction because they get emotional. You can remove some of the emotion by knowing your numbers. Work with an Expert If you are not confident in bidding and need some help, it’s possible to work with a buyer’s agent, specifically to bid for you at auction and even negotiate. Buyers’ agents are professionals who purchase property for a living. Working with a professional can help remove any emotion and enable you to bid on a property without the undue stress of the day. Why YFA? Our motto has always been “Honesty” and Over 20 years, we have always believed that understanding the customer requirement should be the first priority. We are very passionate about helping individuals and families to identify financial goals with the correct focus on their plans for the long run through us home loan advisor. We feel proud and blessed to win awards because of successfully assisting people to achieve financial success. What makes us stand out from others is the utmost trust from our clients who have trusted us. We have always aim to provide updated yet useful blogs by adhering to traditional values of transparency and integrity, while continuing to bring steady and consistent performance over the long term. Our home mortgage experts is always there to assist you. We love going beyond the bolts of financial crisis in an easier manner just to help people believe that money never blocks their happiness. Our mortgage broker try to the best of our abilities to be a sane, and trusted entity in the sector of Wealth Management via providing services in Finance & Insurance. Credit Rep Number – 418883 | ABN – 8119516623 Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.