Preparing to Buy at Auction
Buying a home or investment property at auction can be exciting although daunting at the same time. A large crowd and competition from other buyers can make it easy to get caught up in a bidding war. All buyers need to be prepared when attending and auction, especially for this first time, and know their limits and how much you would be prepared to pay.
Here are some of my top tips to help you take advantage of the next auction you attend:
Make sure you are Buy-Ready with a formal pre-approval
Not all pre-approvals are equal. For complete confidence at auction, I’ll arrange a formal pre-approval. You need to apply through a lender which will complete a full assessment of your financial situation and not just generate a system-based pre-approval. Only with a formal pre-approval which has been fully assessed can you be confident of your maximum borrowing capacity which puts you in a stronger position to bid or negotiate.
Work out your highest offer
Choosing the right lender and product can mean the difference between getting the house of your dreams and missing out. I can do the legwork to keep you streets ahead of other buyers by working with a range of lenders to work out your maximum borrowing capacity. Your maximum borrowing capacity means the highest amount you can borrow – essentially, your limit when bidding at auction.
Can you keep bidding?
Knowing your maximum bid is just one part of being prepared. Knowing how much each extra bid will cost you in weekly repayments can help you make the tough decision of whether to keep bidding or not.
Once you have your finances arranged, it’s time for the fun stuff - searching for that property you really like! Visit lots of open-for-inspections and auctions to familiarise yourself with the process and learn how to recognise value when you see it. Once you find ‘The One’, don’t forget to obtain a contract of sale and conditions of sale from the agent which you should then pass on to your solicitor or conveyancer to check over.
So there are my tips for successful auction bidding. If you are the winning bidder on the day you’ll be expected to pay the deposit (usually 5-10% subject to the auction requirements) and it is at this point where you are 'unconditional' so do talk to me about getting your finances in order before you bid so you can buy with confidence.