1. Make sure you have unconditional approval
Auctions are unconditional, so as soon as you bid, you need to be able to purchase the property as is, so be sure to confirm with your mortgage adviser that you have no pending conditions before bidding. The lender may also want to know specific details about the property before you attend the auction, even if you already have pre-approved lending.
2. Do your homework
Once you’ve won the auction, there’s no going back. You need to make sure that you’ve done all your homework on the property you’re bidding on before the auction. This includes getting a builder’s inspection, viewing the LIM report and Sale and Purchase Agreement, and viewing the house in person more than once.
3. Get a lawyer involved
This might be an obvious one, but many people think that a lawyer doesn’t need to be involved until after you’ve won the auction. It’s imperative that you get a lawyer to look over the current title and Sale and Purchase Agreement with a fine-toothed comb to make sure there isn’t anything in there that could be a problem for you.
4. Attend other auctions
Although it might be tricky to find the time, observing a few auctions before attending the one for the property you want is absolutely invaluable. You’ll get a great feel for how it works and what is expected of bidders. It’s a good idea to experience auctions both at formal locations such as realtors’ auction rooms as well as on the site of the property itself.
5. Register your interest
Once you’ve got a feel for how auctions work and you’re attending the one for the property you’re interested in, it’s important to register your interest upon arrival and receive a bidding card that entitles you to bid. You should also make the real estate agent aware you plan to be at the auction – as much as people like to keep their cards close to their chest, if the auction date changes or any important information comes up, you’ll want to be in the know.
6. Have your deposit ready
If you win the auction, you’ll need to have the deposit ready for payment on the day. Make sure you’ve got everything sorted, including any KiwiSaver funds, and be sure to have any transfer limits removed or increased so that you can transfer the funds straight away without any hassles.
7. Know your limits
It’s easy to get swept up in the fast-paced back and forth bidding wars, but remember that if you’re successful, you’re the one who needs to fork out. Have a budget in mind and make sure to stick to it as closely as you can – if you set your limit slightly higher than a rounded figure, this might give you an advantage as many buyers set rounded figures and tend to stop once they’ve reached that number.
8. Keep your composure
When bidding at an auction, it’s a good idea not to give anything away. Even if you’re close to reaching your budget, the other bidders don’t know that, and if you’re looking a bit frazzled or worried, this gives them an indication that you’re wearing thin and they may push a bit further to knock you out of the competition. Keep calm and composed and you may find yourself the happy owner of your dream home!
If you’d like some more tips, or you’d just like to know where to start with purchasing your next home, get in touch with our fantastic mortgage team today – we’d love to help you out!
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