6 Things You Need To Know Before Bidding At Auction
Preparing for an auction is more than stopping for a takeaway coffee on a Saturday morning! You need to be prepared. This is serious business, the most successful bidders at an auction put themselves in a position to win. That’s all you can do if you have a budget, be a confident, effective bidder who understands their position and the value of the property.
To take the stress out of auctions, the team at Your Property Australia has put together the top 6 things you need to know before bidding at auction. If you can tick off these 6 things then finish off that coffee…you’re ready to go!
- Contract of Sale has been reviewed ✔
- Vendor Statement has been reviewed ✔
- Finance has been confirmed ✔
- You understand your bidding strategy ✔
- You understand how buying at auction is different from a normal purchase ✔
- You have an exit strategy from your current property ✔
The lawyers at Your Property Australia have compiled a comprehensive list. Let’s take a look in more detail
Contract of Sale has been reviewed ✔
You knew that this auction was coming up weeks in advance, so at a minimum you should have handballed the Contract of Sale onto your lawyer at Your Property Australia. With a Contract Review and phone call or email you will have piece of mind that you know what your legal rights and responsibilities are if you win the auction.
Vendor Statement has been reviewed ✔
Do you know what you’re buying? Whilst the Contract of Sale is the framework for the legalities of the transaction, the Vendor Statement gives you plenty of important information about the property. Can you afford the Council Rates and Owners Corporation Fees? Do you own a separately titled carpark or is it common property?
Finance has been confirmed ✔
Don’t go into the auction blind! PLEASE don’t go into the auction without knowing exactly how much you can afford to bid. You might say ‘who makes that kind of mistake?’ Well good, normal people make that mistake all the time. They go to an auction, fall in love quicker than a Netflix romantic comedy and before you know it they have signed the contract…and desperately contacting their mortgage professional to make sure they can afford it.
Don’t let that be you. Apart from the Netflix romantic comedy. They are great! Falling Inn Love…anyone?
You understand your bidding strategy ✔
Bid first, bid last, bid often if you like, but make sure that you have a strategy. If you know that you’re getting too nervous before the auction then chances are those nerves aren’t going away on the big day. Bring someone along with you that is ‘independent’ of the purchase who can bid on your behalf and drag you away if you start bidding like wildfire!
You understand how buying at auction is different from a normal purchase ✔
Remember that if you win an auction the expectation is that you will sign the contract and purchase the property at that price. This isn’t a time to start negotiating your position. Auction sales are also not ‘subject’ to finance, pest inspection or building inspection, they are unconditional contracts.
You have an exit strategy from your current property ✔
Most people forget that with most settlement periods between 30-60 days, if you plan to bid seriously at an auction you should consider how you are going to move from your current property.
If it needs to be sold then you need to have that property on the market, if you are moving out then you need to give notice of your intention to move out. Time goes VERY quickly during the settlement period and having an exit strategy will give you piece of mind that your next mind will be as smooth as possible.
If you’re standing around before an auction starts or preparing for the weekend’s action, remember to take a look at ‘The 5 People You Will Meet At An Auction…And How to Beat Them!’ Click here to read more.