Buying at auction is an adventure as well as a business strategy. It’s exciting, nerve-wracking and can end up with someone spending more than they intended.
If you buy at auction correctly, however, you can walk away with an absolute bargain.
Whether you are buying for investment or simply looking for a new family home, it is imperative that you know what to look for in a property under the hammer.
Here are three tips to make sure you get the best result when hunting for an auction.
1. Choose a house over a unit
First, some hard numbers. Houses sell more than units at auction. According to a CoreLogic study in 2015, 20.4 per cent of houses were sold at auction whereas only 16.4 per cent of units were sold in the same manner. With that difference in numbers, you will see a greater range of houses than units, meaning you have far more choice in selecting your new property.
While units can be a little less dear than purchasing a house for investment, most buyers find aproperty investment loan to be integral to making the most of their properties.
2. Choose the right time to buy
Property trade has phases. Real Estate View explains that properties fluctuate in price according to a specific pattern: an upturn/boom, a slump, then another upturn. It is obviously best to buy while prices are low and about to return to a high.
According to extrapolation from Trading Economics data for the last 10 years, property prices tend to slump and then dramatically increase by the middle of the year, so buy quickly before the increase, and sell on at the peak.
It can be difficult to know when this is, but with the help of a skilled real estate agent, it is perfectly possible to buy at just the right time.
3. Choose a property with history
Get to know the history of the home before you invest.
Even if you are planning on buying your first home, it is always best to think ahead for resale: you may not be there forever! When it comes to selling and moving on, a house with history can make a huge difference in value.
Even homes that have no obvious history may have some tales under the floorboards. Check with your local records office or consider hiring a research firm: you may find some historical nuggets to help add interest and value to your property.
When it does come to sell, house historian Nick Barratt said in in a June 2011 Telegraph article that a storied tale could “make the difference between your house selling and not selling”, so it is best to do your research!
You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete ourcall request form and we’ll call you!