Be prepared for auction day
For both buyers and sellers, an auction can be a stressful occasion. It can move so quickly that you don’t fully register what is happening until afterwards. For potential buyers, this can mean getting swept up in the drama and bidding more than you can afford.
To stay grounded on the day, there are several things you should do ahead of time. The first is to speak with a mortgage broker early in the process. They will be able to give you expert advice on what to expect, how to work out your budget and help arrange a pre-approval.
Having a pre-approval will give you an edge against other buyers who may not. While it doesn’t necessarily guarantee that you’ll get a loan, it shows that you’re committed to purchasing a property. Also just knowing you’ve taken that initial step in the loan process can boost your confidence—and when you’re competing against a crowd of other bidders, confidence comes in handy.
To further stand out among the crowd, you’ll want to be calm and composed. Auctions can seem intimidating if you’re not used to them, so do your research and ask family and friends about their experiences bidding so you know what to expect. Attend auctions to get a handle on how they work. There are many articles online with tips from top auctioneers (like familiarising yourself with the auctioneer’s style) and the dispelling of strategies (such as holding back throughout the bidding). This knowledge can help you feel more assertive on the day.
Lastly and most crucially, make sure your budget is established (which your broker can assist you with). Stay up to date with market rates to try to figure out how much the property could go for. Decide both on what you’d like to pay for it and how much you’d feel comfortable going up to if need be. Identify what your price limit will be.
It’s important that you put boundaries in place to make sure you don’t go over your limit. Even the most sensible person can get disorientated by an auction’s high stakes drama and sense of urgency, but once that adrenaline dissipates, you could be left feeling anxious about having committed more than you can afford. Having a buyer’s advocate or family or friends there with you can help you stay on track and avoid getting in over your head.
Whether you secure the home of your dreams at your first auction or become a regular fixture at a few auctions, being prepared will put you in a good position to make the most out of this fast-paced event.