The property market in Australia is driven by auctions, especially over the last few years when property prices have been rising.
Buying at auction can be far more emotionally fraught than simply buying through an agent but avoiding properties that are going to auction means missing out on lots of potential opportunities.
The key to buying at auction is doing the research prior to the day. You need to know your financial limits and arrange pre-approval for any loan. It is easy to get carried away with the excitement of an auction – it is an adrenalin inducing experience – so it is important you decide in advance your highest price. This may change from auction to auction – you may be prepared to go higher for a better property – but knowing this amount before getting to the auction is essential and will keep you from getting caught up in a bidding war. For this reason, it’s a good idea to attend other auctions in the area prior to the one you intend to bid on. This will give you an idea of the market price in the area (as opposed to just the asking price).
There is also the option to have someone bid for you at the auction – this should be someone experienced with the auction process and you can trust. This needs to be organized prior to the auction as you will need to grant a limited Power of Attorney to the person bidding on your behalf (a proxy bidder).
You also need to ensure you have checked through the section 32 and contract of sale. This may involve getting legal advice if you are not sure of exactly what is in these documents. It is a good idea to get your solicitor to check these documents as this will ensure no surprises after purchase.
Finally, remember that the real estate agent is ultimately there to make as much money on the property as possible. They will be friendly and while they may be helpful and give sound advice, they are also acting on behalf of the vendor. Don’t reveal specifics your financial position – your top price for example – as this can be used to the advantage of the real estate agent. This can be used to influence other potential bidders or help the vendor set a reserve.
Of course, there are buyer’s advocates that can take a lot of the stress out of buying property. Accrue Real Estate have the experience and local knowledge to help.