The chance to market and sell a home within a set timeframe, while making sure full market value is achieved, has led to auctions becoming a popular way of buying real estate. However, if you’re an auction newbie, the whole process can seem a little scary at first glance.
One of the best ways to ensure a successful auction purchase is to prepare well in advance and perform as much research as you can. Then you can be sure you will enter the market with the confidence you need.
Sort out your finances early
The first step when purchasing real estate by auction is to get your finances in order as soon as possible. Get in touch with a mortgage broker or lender to determine how much you can borrow. This will give you an idea of your budget and what sort of price range you should be looking for.
You can also get your home loan pre-approved, which is definitely useful once auction day rolls around. Pre-approved finance can last for a few months, so this should be sufficient time to look for a home.
Set a bidding limit
Once you have your budget in mind, you can set your bidding limit. It’s crucial to stick to this figure on auction day to prevent spending more than you can afford. Remember to leave some space to accommodate any last-minute bids, but know your absolutely final limit.
Select a strategy
Before the auction starts, it’s best to determine a bidding strategy. Some buyers prefer to bid straight off the bat as soon as the auction starts, while others wait until the last few minutes as things begin to really heat up. A few buyers may jump in with a large bid to knock others out of the water, or some people might up the ante with a series of small increments.
Whichever strategy you decide to adopt, make sure you keep your budget in mind and your feelings at bay!