Auctions haven’t exactly got a good rep of late. What, with a flurry of activity and a rampant rise in values, especially in Auckland, there have been certainly more than a few buyers who have called them out as absolute nightmares.
But love them or hate the, auctions are a reality when it comes to house buying. Let’s look at the best ways to conquer your next auction, so hopefully you’ll be the one walking away with the spoils.
1. Do your homework
Before you even consider bidding on a property, you need to do all your research. It’s kind of one of those phrases thrown around as the number one thing to do for home buyers, but for good reason. Especially with auctions, where your final bid is binding, you can’t go back or change your mind, so having all the info you need before you raise your hand up to bid is pretty critical.
So what can you do?
- Get a building report. A builder will be able to tell you if there’s anything structurally wrong with the property.
- See what the council knows. Homes.co.nz has freed up the council public record for most homes in NZ. Bedrooms, materials, and house size should all match what the seller is saying, or you’ll want to dive a little deeper by ordering a council property file.
- Get a LIM. See things like if there are any restrictions on the property and what’s happening in the area, like if you’re going to have a motorway built next door.
- Do a drive by. While you don’t want to look like the neighbourhood stalker, taking a drive at different times around the area can give you a look at what it’s like to live there, including things like noise levels.
- Get your lawyer to check everything over. Especially if you are a newbie, getting your lawyer to check over all the important docs and the sale and purchase agreement in advance can give you some peace of mind.
2. Get to know the area
Especially when the market is hot, sale prices can get a little out of control, and values can skyrocket. But that doesn’t mean you have to go in blind as to what the property will go for, or what you should realistically pay.
A site like homes.co.nz can show you:
- Comparable sales. What other similar properties have sold for nearby.
- What else is on the market. See if they have a listed price and also get a feel for whether interested buyers have a choice in the area or whether they’ll all be preying on the same property as you.
- Estimated values. While you used to have to pay for these, Homes.co.nz has a free computer-generated estimate on most homes to give you a rough idea of value, both of the property itself and surrounding, comparable properties. They are more up to date than Rating Valuations, but of course if you want an assured value you can always pay for a Registered Valuation (but they will set you back a fair few hundred dollars).
3. Get your money sorted
Auctions are quick, to the point, and final, so you will need to make sure you can front up with the cash should you win. Talk to the bank, get your pre-approval in place so you know how much they will lend you, and of course make sure you can access your deposit money.
4. Get some practice in
If auctions fill you with a bit of fear, or you simply have just never been to one, Andrew North, Harcourts Cooper & Co auctioneer and current REINZ Auctioneer of the Year, recommends watching other auctions before yours.
“Auctions are not something you do every day. Each one is different, and each one deals with different people, so you need to have the ability to be flexible and fluid,” he says.
“In saying that, watch other auctions before yours. Watch how they bid and try to guess who the winner is going to be by their body language, then you can try to replicate it.”
5. Stick to an auction strategy
Do you hold tight and wait until right at the end to bid? Or do you put in a large bid early to scare everyone off?. It’s all tactics, and some may work for you. But at the end of the day all that matter is if you’re the last one standing.
Looking for a new home?
Westpac has info and tools to help you navigate the house hunting process: