8th May 2023 / Sarah Lowry: Tips for Buying at Auction

Auctions have been a part of the Melbourne real estate market for years. It's a unique way of selling property where buyers bid against each other until the highest bidder wins. But buying at an auction can be intimidating, especially if you're new to the experience. There's a lot of competition and pressure to get the best deal. We'll provide some essential tips for buying at auction, to help you feel more confident and prepared.

Do Your Research Before the Auction

It's essential to know everything you can about the property you're interested in before the auction. Look at the suburb's real estate trends and prices, visit the property multiple times, and inspect it thoroughly. Speak with the agents who know the area to get a better sense of the market and what the property is worth. Attend other auctions to observe how they work and understand the bidding process better. Make sure to review the terms and conditions carefully so you can bid correctly when the auction begins.

Set a Budget and Stick to It

Auctions can become emotional and fast-paced. It's easy to get caught up in the excitement and overpay. To avoid overspending, set a budget beforehand and stick to it. Consider how much you're willing to pay for the property, and don't exceed that amount. Stay focused and remember that there will be other opportunities if you don't win. It is worth giving yourself a 'stretch' amount so that you don't miss out on your dream home for $1,000 or similar - factor this into your budget and affordability calculations.

Register Before the Auction

Whilst you don't have to register to bid in most circumstances, it's worth letting the selling agent know of your interest and intention to bid. This will ensure you are kept updated with any changes to the campaign, for example, if the vendor is considering selling prior to auction.

Hire a Professional to Bid for You

If you're unsure about bidding at an auction, consider hiring a professional to do it for you. Buyers Advocates and Buyer Agents specialise in representing buyers at auctions, and their experience can be invaluable. They'll know how to bid strategically and when to stop. Also, they can provide advice on prices and conditions.

Be Confident, Focused, and Always Bid with a Budget

When the auction starts, remain confident and focused. Watch the competition and wait until the bidding reaches your budget before placing a bid. Naturally, the bidding moves quickly, so if you hesitate for too long, you could miss out. Always stick to your budget and try not to get caught up in the excitement. If you're keen on a property and it looks like it will pass in on a vendor bid, it is worth putting in a bid so that you have first right to negotiate with the vendor at the reserve price.

Buying a property at an auction in Melbourne can be a daunting experience, but with the right preparation, you can succeed. Research thoroughly before the auction, set a budget, register early, hire a professional to bid for you, remain focused, and always bid within your budget. Remember, always have a strategy in place, and don't act impulsively. Good luck with your next auction!