Must know tips for auction TO MAXIMISE THE CHANCES OF WINNING AN AUCTION PROPERTY, PERFORMING YOUR DUE DILIGENCE IS JUST AS IMPORTANT – IF NOT EVEN MORE CRUCIAL – AS THE ACTUAL BIDDING ITSELF. BY SMART PROPERTY INVESTMENT’S CHRISTINA ZHOU WWW.SPIONLIONE.COM.AU
Before heading out to the auction, investors should be WORKING BACKWARDS TO ESTABLISH A LIMIT armed with some auction strategies and be sure to have Right Property Group’s buyer agent, Steve Waters says their due diligence checkboxes ticked. it is important that investors stick to their ‘absolute’ • Attend as many auctions as possible limit. “Go in there with your absolute best foot forward • Inspect as many properties in the area as possible – [knowing] this is my limit and not a dollar more,” he • Valuate and physically inspect the property • Have your advised. “That way, it’s very black and white.” pest and building report • Look at property data • Have To avoid overspending, investors could also try working your ﬁnances pre-approved • Go over the contract with backwards to establish a limit, he suggests. “You need a solicitor • Find out who the auctioneer is. to make sure that your pest and building reports have As the legislation various from state to state, it is also been carried out, and that any renovations – if you important for investors to know the auction laws in their plan to do one – that you’ve costed it out. Have all your state. For example, in New South Wales, if the property tradesmen and suppliers and your installers in there falls under the reserve and is passed in, negotiations on to give you quotes so that you can work out your total the day before midnight will still be under auction con- spend on the property.” ditions. However, in Queensland, investors are able to DON’T FALL INTO A RHYTHM Veronica Morgan, negotiate the property out of auction conditions, into a principal of Good Deeds Property Buyers and co-host cool-off period. at Location Location Location Australia, says while
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there is no single auction strategy, it is important not to fall into a rhythm. “There are times when we bid strong and we only use $1000 bids,” she says. “And other times, we’ll mix it up – $10,000, $5,000, $20,000, $2,000 so it keeps everyone guessing. The one thing I would say to be very careful of at an auction is getting into a rhythm because that’s what the auctioneer wants you to do – to get into a rhythm of bidding. “If you’re in a rhythm, then you’re not thinking.” Provided investors do their research and their due diligence, they could potentially be some good opportunities to be had. “We encourage people not to be scared of auctions,” Ms Morgan says. “A lot of people try to avoid auctions based on fear, and to avoid that, you could really be costing yourself. “A lot of people make pre-auction offers based on fear rather than really assessing the situation.” If they held off, they could have paid less, she says.
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Published on May 31, 2013
Published on May 31, 2013
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