BUYING SMART AT AUCTIONS
31st July 2006
Purchasing property at auction can be a blessing
or a nightmare, depending on how well prepared and disciplined
buyers are, according to property buyer's agent Trevor Dunkley.
Mr Dunkley of Property Wizards Buyers' Agency
said there were several advantages of buying through the auction
process, if buyers had done their homework.
"Because all the offers are known to the
buyer at an auction, smart operators will bid gradually and
pay just a little more than their competitors - if it's within
their budget and up to market worth - to secure the property,"
he said.
"If you keep a clear head, it can be a clever
buying opportunity because you don't have to try and guess what
other buyers are thinking then try to come up with a foolproof
offer to beat that."
But Mr Dunkley warned this winning auction strategy
was only possible for investors who were fully prepared.
"The word of warning about auctions though
is that if people aren't disciplined and well-researched they
can fall into the trap of getting caught up in the heat of the
moment and pay too much," he said.
Another pitfall to watch for was that buying at
auction could be more costly.
"If you are truly interested in purchasing
a property that will be sold at auction, the contract will likely
be unconditional, so if you're serious about the home, you will
have to pay for building and pest inspections ahead of auction
day - even though you may be the winning bidder," Mr Dunkley
said.
He said investors were teaming up with buyer's
agents to buy at auction for several reasons.
"Unlike the homebuyer, we are not emotionally
attached to the property, so there is no risk of paying too
much for the property," he said.
"We help investors assess the right price
to pay ahead of auction day and thoroughly investigate the property
so that purchasers don't end up with a lemon.
'We also plan and agree on the auction bidding
strategy before it begins so that we pay only what the property
is worth.
"This sort of planned strategy ensures that
if any illegal dummy bidding is taking place, you are not unduly
affected by it."
Mr Dunkley says if a property is passed in at
auction, negotiations normally began with whoever was the highest
bidder, but he pointed out it was certainly possible to approach
the agent with an offer.
TOP TIPS FOR SURVIVING AUCTION BUYING
