In Australia, there are three ways to buy a house—directly from the owner, via a real estate agent, and at auction. In some states, buying at auction is more widespread that regular way of purchasing through an owner’s offer. Some first-time buyers, especially foreigners, may find this auction method unusual for properties. But keep in mind that in some areas auction bidding is the only way to purchase a house. Therefore, here are several tips for buying your Aussie dream home via auction:
Get Your Mortgage Pre-Approved First
Don’t head to a property auction without having your mortgage pre-approved. It will naturally set the budget limit for you. Keep in mind that auction buying doesn’t allow for a “cooling off” period like regular sales. That means when the auctioneer declares your bid the winner, you might as well be the new owner of the house. If your bid for a property that isn’t covered by your mortgage, you could land in serious legal trouble. Therefore, know how much you can afford before you start placing bids.
Do Your Research in Advance
Because auctions don’t allow for cooling off periods, make sure you know what you are buying. That means you should do your property research well in advance. When you are searching for properties by neighbourhood, make sure you have all your bases covered. For example, if you are looking for real estate Gladstone Park, consult with local agents before you end up at an auction. Knowledge is power.
Visit an Auction First
If you have never seen house bidding at an auction before, go to an auction just to observe how everything is conducted. It can be an adrenaline-induced experience. You don’t want to be overwhelmed when you want to desperately bid on a property. Therefore, visit several auctions to get used to the atmosphere to be comfortable when you do want to bid.
Question the Asking Price
Don’t simply take the asking price for granted. Do ask the seller why the price of the property is as high or low as it is. There should be a solid justification for the price of the property. Otherwise, you risk severely overpaying for an underwhelming property at auction. You can compare the price to past sales in the same neighbourhood. If the seller’s agent is not helpful, don’t bother with the property because it could be overpriced.
Don’t Bid with Renovations in Mind
If you want to buy an old house to renovate in the future, make sure doing so is possible before you bid. You should ask the seller if renovations are possible. Better yet, as if anyone else on the block has renovated their property. Remember, renovations are subject to local building codes. Know these if you have renovations in mind.
Last but not least, don’t give away your game. Selling agents would probe you for specifics to get you to bid at a certain price. Don’t fall for it. Once the bidding does begin, start low as typical and go high. Don’t bid too enthusiastically because you might be drawn into paying a higher price.