Hammer Down - Tips To Getting Ahead At Auction

We caught up with one of Australia's most experienced Auctioneers to discuss the essentials that every home buyer should consider leading up to the day of bidding! Here are the tips you need to get the best results:

1. Do Your Market Research

If you don't know what other, comparable properties in the immediate area have sold for then you're already at a serious disadvantage when it comes time to place a bid. A number of third party sites publish a significant amount of data regarding which properties were sold, and for how much, and you can take advantage of this. More recent results are always good, as generally speaking they will be a fairer reflection of market conditions at the time you're looking to purchase. The closer the property matches to what you're looking at, in terms of size, style and location, the more relevant that information will be. Possession of sales data arms you with a far better sense of what you think fair market value is. 

2. Make Sure Your Finance Is Organised

Before you start making any offers or bids it is important to know exactly what your capacity to borrow is. Speak to your financier and get absolute clarity in terms of what you are able to put down as a deposit, and what they are prepared to stump up as a mortgage. Clear out any clutter in your accounts and think of a specific action plan for how you can adequately cover any repayments over the coming months. This allows you confidence when you move into an Auction setting knowing specifically what situation you're in.

3. Review The Contract For Sale Of Land

Generally speaking, when you're buying a house, you want as few surprises as possible. One way to accomplish this is to thoroughly review the Contract of Sale and make sure you know some of the finer details of your dream home.  Take note of any special inclusions, strata plan and any particular conditions that might apply to the property and its sale. You'll also be able to see the current lease if the property is tenanted, and zoning certificate. The more intimately you know the property you're looking to purchase, the better off you'll be!

4. Engage Your Local Solicitor 

At N G Farah we believe wholeheartedly that local expertise is crucial to delivering the best for our clients. As such, we recommend the same when engaging with other professionals. The greater knowledge the people working for you have of the area and its population, the better equipped you are to make the right decisions. It can also make the procedure easier for those executing any transaction for you. It isn't absolutely necessary, although it may make your life easier.  

5. Apply For Building/Strata Report 

This follows the same line of thinking as the Contract of Sale, but here you're getting into the nuts and bolts concerning the condition of the property. For strata titles, if there are any non-regular payments that need to be made (such as a Special Levy), a sinking fund for the property, or conditions for renovations then they can be found in the Strata Report. Otherwise, you can get the best sense of the physical state of the property by commissioning a thorough Building Report. Be sure to look out for any issues with regards to structural integrity, pests or points of water entry. By the time you make a decision to bid, you'll know it like the back of your hand!

6. Set Yourself A Limit Before Auction

Certainly not new advice, but worth stating nevertheless. The points prior to this one all allow you to assemble as much information, and as many resources, as you can in the lead up to Auction. If you do it the right way, then you should already implicitly know what your hard limit is, especially if you are seeking to mortgage. If it is informed properly, then there really is no use in breaking that limit. People can only afford so much and it can be an especially painful situation if you're stretched beyond your means. Trust in the research you've done and stick to your convictions. 

7. Once The Bidding Starts, Bid With Confidence

You know what the property is, the condition it's in and what other properties like it have sold for. You know what state you're in financially and the limit to your borrowing capacity. If you've done this homework, then engage in the process with enthusiasm. That's not to suggest that you're sure to walk away with the winning bid, but you will have placed yourself in the best position to do so!