A Step by Step Guide to Buying a Property at Auction.

Step 1: Arrange a home loan pre-approval – this will tell you how much you can afford and what deposit you will require.

Step 2: Get in touch with local real estate agents and start searching for a property. Ensure you are on their database to receive email alerts for upcoming property auctions that meet your criteria and are within your price range.

Step 3: Attend various open homes and auctions to gauge what the market is like and get a feeling for how the process works.

Step 4: If you have received a conditional loan approval and if you are interested in a property, ask the real estate agent for a copy of the Contract of Sale. Find out if the seller will sell under an Auction Guarantee.

Step 5: Establish how much you are willing to spend on the property. What is your maximum bid? When the auction comes around, this will stop you from bidding more than the property is worth, or more than you can afford.

Step 6: Have a solicitor check the contract for you. If need be, arrange for building and pest inspection reports.

Step 7: Prior to the auction, make sure you have sufficient funds available to pay the deposit, should your bid be successful. The deposit will usually be 10% of the purchase price, unless negotiated prior. If paying out of your own funds, a bank cheque or personal cheque can be used. Or, if you’re using a deposit bond, talk with your finance broker of bank to get it organised.

Step 8: Register to bid. In some states you can do so by contacting the agent before the auction or on arrival. You will need identification with you to register at the auction. If you wish, you can authorise someone else (by written approval) to bid and sign on your behalf at the auction.

Step 9: Make the winning bid!

Step 10: Sign the contract and pay the deposit.

Step 11: Advise your finance broker / bank of the property details.

Step 12: Wait for your finance broker / bank to advise you on unconditional approval and a settlement date. Now is an ideal time to sort matters such as insurance for your new property and to start planning for your relocation (movers etc.)

Step 13: Move in and enjoy your new home!