Three things buyers and sellers need to know before auction
Australia's property markets - particularly in our capital cities - are seeing an increase in auctions. More sellers choosing to go to auction means more buyers are purchasing properties under the hammer. Auction day can be a daunting experience for both parties, so here are three pieces of advice for both buyers and sellers preparing to go to auction.
Tips for buyers
Prepare your finances
It may seem obvious, but there's much more to consider than just saving up a deposit. Financial preparation is the key to successfully buying a new home at auction. Setting your financial limits, finding the very best loan for your personal circumstances and arranging for that home loan to be approved are just a few things you need to prepare in order to bid under the hammer. Remember, if you are the successful bidder, you sign the property contract on the spot - be ready for that.
Be ready to act from day one
Do your due diligence before you start house hunting so you can act at any time. A standard auction campaign runs for four weeks and many agents and sellers will be happy to accept an offer before auction day. If you start searching for properties before you are ready to act, you risk missing out to other buyers who are prepared to make an early offer. Be ready from day one and give yourself the best chance of securing your new home.
Bid to your budget
When bidding on auction day set yourself boundaries. Bid to your own budget and not the budget's of the people you're competing with at the auction. When preparing your finances, you'll be shown what you can comfortably afford to pay for a property. Don't get carried away and bid above that amount - even if it's your dream home. Know your financial limits and stick within them.
Tips for sellers
Don't buy into the hype. There's no doubt that property markets across Australia are strong, but buyers won't pay unrealistic prices. Be clear on your what your expectations are from the sale and make sure that these are in line with your agents assessment of the home's value and current market conditions. Know your financial goals and if you're selling your property to buy something new, it's a good idea to health check your financial security.
Seek clear communication
Communication is key when you take your property to auction. Insist that your real estate agent sends you a written report every week of your auction campaign. These reports give you clarity around how attractive your property is to buyers, who's interested and what they're willing to pay for the home. Ask your agent to ensure all serious buyers are financially prepared with a deposit and loan approval ready to go. Understanding the level of interest in your home, and who the buyers are, will minimise the risk of any surprises on auction day.
Insist on professional auctioneer
With the amount of auction activity in the current market, often the most experienced auctioneers are in high demand and can be hard to secure. Be sure that that the auctioneer who is employed to call your auction is professional, experienced and has an excellent relationship with your real estate agent. If these areas are lacking, the impact will ultimately be on the sale price. Remember, an agent and auctioneer work hand in hand together and one can't be successful without the other. Their relationship is critical to a successful auction campaign.
If you're preparing for auction and want to be confident of your financial security, speak to us today and make sure - whether you're buying or selling - that you reach your property and financial goals.