Most buyers don’t enjoy the competitive and very public nature of auctions, but regardless, it remains the most popular way to sell a property in Sydney. Right now, with the market cooling, buyers have less to be nervous about at auction as the number of bidders and auction clearance rates have fallen. Go to auction, and you could end up grabbing a bargain.
The latest CoreLogic figures have Sydney clearance rates at 66.2%% across 1359 auctions for the week to March 25. The same time last year, the rate was a more robust 75.8%.
Love them or loathe them, auctions are here to stay so if you are looking to buy a house, chances are you will at some stage need to participate in this popular selling method.
For those who have done their homework and developed a buying strategy, auctions can offer the following advantages:
- Transparency: All purchasers have an equal opportunity to bid in a public arena.
- Possibility: You might pick up a bargain or otherwise secure your dream property.
- Certainty: With Sydney auction clearance rates currently above 60%, there is a strong likelihood of achieving a result at auction.
If you are considering buying at an auction, it is important to remember that contracts are unconditional, so if you are the successful bidder, there is no cooling off period and no turning back.
5 Winning Auction Tips
To be successful at an auction, you need to come to the competition confident and prepared. The following smart strategies may help:
- Do your homework. Dig deeper into the market by looking at what similar houses in the area have gone for, how many similar properties are on the market, and how fierce the competition is likely to be.
- Research the property. Order a building and pest inspection report, and if the property is on strata title, organise an inspection of the strata records.
- Consult a solicitor or conveyancer BEFORE bidding at a property. Ensure that you fully understand all the legal implications of auction property buying and any issues with the Contract.
- Have your finances approved and know your limit. Make sure you have sufficient funds in place and pre-approval for any finance. If you are the successful bidder, you will need to provide the 10% deposit (or another amount previously agreed by the vendor). You will also need to be prepared to walk away if the bidding goes beyond your budget.
- Enlist the help of a Buyer’s Agent. They will be able to advise you on how much you should be paying, and can also bid on your behalf at the auction.
According to a recent analysis by Gavl of 2500 Australian auctions, the most common winning bid is an increment of $10,000, while the average auction takes almost 16 minutes. A confident approach backed by decisive bidding can intimidate other bidders. So start and stay strong, bid quickly and leave some money up your sleeve to go in hard at the end.
If you are considering buying a property at an auction, experienced Buyer’s Agent, Nick Viner can give you advice regarding a property’s likely selling price and bid on your behalf, contact Nick now on 0405 134 645.