We have a new property going to auction so we thought it would be timely to share some of the most common errors inexperienced auction buyers make.
More and more West Australians are showing interest in auctions because of the many benefits associated with this method of selling. One of those is a faster sale. Another is that an auction presents buyers with a level playing field, which makes it a transparent and equitable process.
That being said, there are some common errors inexperienced auction buyers make.
Here are 6 of the most common…
- Lack of preparation – There is nothing worse than the hammer falling only to discover that the deposit that’s due or the settlement date that’s required can’t be met. It is vital to consider all aspects of the auction process before auction day, from how much deposit is required on the day to the agreed settlement terms, the legal review of the contract and determining who will bid and who will sign the contract.
- Failing to review the contract – Some properties have covenants preventing the new owners from certain activities or making changes to the property. Avoid nasty surprises by reading the contract thoroughly before bidding on the day.
- Failing to stay in touch with the agent – Sometimes properties up for auction sell prior to the day if any offers received early are high enough to satisfy the owner. Without staying in touch with the agent, you could find a sold sticker on the signboard without having had the opportunity to put your best offer forward. Your agent will advise if you should consider putting your best offer forward before auction day based on what other potential buyers are doing.
- Letting emotions rule – Some buyers become overly caught up in the emotion of it all, causing them to become very competitive and potentially end up paying more than they set out to pay. It is very important to have a firm budget in mind and stick to it. If there’s someone at the auction who is happy to pay more, walk away and accept that it wasn’t meant to be.
- Being too scared to bid – Being intimidated is another common mistake buyers make. Some buyers are too nervous to even put up their hand to bid only to end up regretting it when the home of their dreams sells for a price they would have been happy to pay.
- Failing to arrange unconditional finance – This mistake is probably the worst one a bidder can make because, unlike the process when a home sells by private treaty, auctions require the successful buyer to sign an unconditional contract and pay the deposit on the day. This is regardless of whether the finance has been approved or not. If the buyer is unable to obtain finance they lose the deposit and could even be sued for damages if the vendor suffers any losses associated with the default.
Buyers who succeed at auction are confident in their budget, understand what needs to be done to prepare for the auction, and are confident bidders. These are the 3 keys to bidding like a professional.
Let us know if you would like to be one of the first to inspect the Penthouse at No 7, 13 Tweedale Road Applecross.