Purchasing property in this day and age can be a a fun, exhilarating experience. Regardless of whether you're looking to buy for you and your family to occupy or as an addition to your investment portfolio, the current market conditions are fantastic for any end goal.
One increasingly popular sales method being adopted by vendors across Australia is auctions. These competitive environments can be intimidating and scary, especially if you've never bought property this way before. Luckily, there are a number of tips to help you gain the upper hand in these situations and come out on top of the game.
Preparation is key to success
Before you even begin looking for a home to bid on, it's important to prepare yourself for the experience. One thing to undertake is proper market research in order to know the type of market you'll be entering into as a buyer. Data like auction clearance rates, median sale prices, average days a property is on the market and the median rental yields for the area (if you're purchasing for an investment) will help you to narrow down the list of appropriate properties for your short list.
Being armed with this information means you'll be making the best choices possible. After all, taking out a home mortgage and buying a property isn't exactly cheap, so ensuring you make the right choices through research and the process of elimination will help you avoid buyer's remorse in the future.
Furthermore, discussing the best type of home loan for you and your property goals is also important. Get in contact with a financial professional about the type of mortgage that suits your needs the best, including your long-term repayment plans, and secure a pre-approval before going to an auction. These are important, as many vendors want to confirm the sale and get the transaction underway almost immediately following the conclusion of the auction.
You can also do your own mortgage research by making use of an online home loan calculator. These applications take financial data about you, such as income, expenses and preferred mortgage repayment time, and offer a number of different mortgages to suit your property needs.
Approaching the auction
On the auction day, keeping your cool is an important thing to practise. One of the main pressures associated with auctions is the competitive edge that comes with multiple people bidding on the same slice of real estate and it can be quite intimidating. Going along to a couple of auctions beforehand and getting a good feel for the environment could be beneficial in the long run, giving you a taste of the action before the main event.
Furthermore, having a definite limit to your spending is essential. The tendency to push your bidding as far as possible to beat out your opponents may seem like a good idea, especially if you've fallen head over heels for a certain property, but keeping your wits about you and knowing your financial limits is better in the long run. Missing out on a home is better than finding yourself drowning in debt for a property you can't afford to make repayments on.
Finally, as mentioned earlier, being ready to move on the sale as soon as the auction concludes will help your chances of success. The business of finances and transferral often happens immediately after the auction concludes, which makes preparation an essential part of moving on the real estate.
These are just some of the basics to remember when approaching a property auction in Australia. Sticking with these guidelines will help facilitate your success in the real estate market in the future.
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