Auctions can be a difficult time for anyone looking for real estate, and even more so when you're doing it for the first time ever. Large crowds and high demand can make the auction a huge challenge when you're not prepared. This guide equips you with winning tactics to help you do well in your first home buying auction.
Set The Limit You Absolutely Will Not Exceed
Your first action should be to do enough homework prior to the auction, so you know how much the property is worth and how much you're willing to spend. Your bidding strategy will depend on your knowledge of the area and your purchasing power; so get started on those things first. Getting a professional market report of the area and for similar houses in the area will help you determine how much to spend on the home. This way you don't get carried away when the auctioneer uses pressure tactics to extract more money out of the bidders on the day.
Get Your Conditional Pre-Approval From Your Lender In Advance
Your ability to bid up to a specific price for the property depends on the approval you get from your bank or lender, and helps you set your budget limit for the day. Make sure you do this ahead of the auction so you know how much you can bid for. Conditional pre-approval means that your lender will assess your situation, income status and loan repayment ability to let you know how much they will lend you, which may be subject to certain conditions like suburb profiles and property valuation. Keep in mind that this is not a loan guarantee, so avoid trying to push your bidding price further than the maximum limit of the pre-approval.
Keep Calm Despite The Pressure Around You And Look For Hints
Your ability to stay calm can make a big difference to your success on the day. Try and take a companion who is practical to help you remain composed and free of emotions on the day. Pay attention to the body language of other bidders to help you better understand the position your opponents are in. For example, anxious and last minute consultations between other bidders and their families indicate that they may be running out of money. Controlling your own nerves and paying attention to others around you can be powerful actions for a successful home buying auction.
Buying a home at an auction is stressful for anyone, but even more so when you've never done it before. Let this recipe for success guide you.