Buy at auction
Buying at auction can really up the stakes for first home buyers. Buying a home is stressful enough. When you’re buying at auction, you have the added stress of the auction itself. Worst case scenario is that you overbid at auction and end up stuck with a house at a price you can’t actually afford.
An auction is a public sale, where potential buyers submit bids in order to buy a property which is sold to the highest bidder. Auctions are common in a competitive property market because it is seen to increase the competitiveness of a sale by getting all the serious buyers in one place and seen to sell the property faster than with a private sale. At an auction you do not get a cooling-off period, so a sold property at auction is final.
For the savvy home-buyer, auctions also represent a great opportunity. First home buyers can buy at auction, and it can present good buying opportunities because most first home buyers are scared to buy at auction given it can be quite daunting. You can try to negotiate with the real estate agent before the auction to secure the home, but failing that you should have your finance in place to be able to buy at auction.
In this chapter, you’ll learn all about auctions and how they work. We’re going to give you the ammunition so you can come to the auction fully prepared and ready to win.
Remember, real estate agents can sometimes try to undervalue a property when bringing it to auction to draw a large crowd of buyers, so before the auction, work out your maximum value that you will walk away from the property… but more on this in a minute.