With COVID-19 restrictions impacting property markets in varying ways across Australia, the uptick in online auctions is continuing.
In Melbourne, where stage four restrictions are in place, open houses, inspections and auctions can only be done virtually. In regional Victoria, now under stage three, would-be buyers can view properties online and schedule a private, socially-distanced walkthrough, but auctions are online.
Rules relating to inspections and auctions are also in place in other states, but are not as restrictive as Victoria’s.
Post-pandemic, experts predict buying and selling property online will become more common, so knowing how the technologies and processes work is vital, especially for buyers.
Here are some top tips that will help you come out successful at an online auction.
Where it’s allowed, prospective buyers should always inspect in person and ask lots of questions of the selling agent, Michelle May, a Sydney-based property flipper-turned buyers’ agent, said.
Ms May recommends inspecting a property at least twice. She said ideally buyers should set up a private inspection where you can take your time and don’t have to compete with other people.
“I find with the second inspection, the rose-tinted glasses come off and buyers can have a more objective, critical walkthrough.”
Look past the “million scatter cushions and the cockatoo print”, as that’s not what’s for sale, she said.
If there’s an attic ladder, climb it and have a look. Use the senses. “Does it smell of damp? Do the floorboards creak? How noisy is the road or flight path?”
If you can’t inspect the property in person, make sure you ask the agent lots of questions: about why the vendor is selling, if they’ve had offers and if they’ve purchased elsewhere already.
“This will help you get a clearer understanding of the vendors’ motive and their likelihood to have realistic selling expectations and also potentially be open to offers prior to auction.”
Regardless of the method of buying, research is vital, Ray Ellis, chief executive of First National, said.
Research recent sales of similar properties in the area, talk to other agents selling in the area and inspect other homes on the market and ask the agent what they think the property might sell for at auction.
Also get building and pest reports and scrutinise the contract of sale closely, Ms May added.
“Did you know the general public spend more time researching which car they are going to buy than doing research to buy their home? We are talking about a huge amount of money and you need to know as much as possible about the property before making an offer.”
With online auctions still an emerging trend, it’s vital buyers or the person they engage to bid for them understand the lay of the land.
“They’re a new thing and a lot of agents are still learning how to run them,” Ms May said
Every online auction will have a different set of rules, depending on which platform it is run on so it’s important to know the rules of engagement.
When planning to bid, ask what ID is required, what paperwork a buyers’ agent or other representative must do to bid on someone else’s behalf, what deposit will be required, what payment options there are and so on.
“Auctions are high-pressure situations and having everything in order ahead of time will help you feel more in control.”
Ms May recommends registering for the auction well ahead of time. Don’t leave it until five minutes before the auctioneer steps up.
“Technology is great, but not infallible, so having that sorted ahead of time means you can focus on the actual bidding when the time comes.”
Some agents require those planning to bid to have proof of or to register a deposit, in the event they’re successful.
This deposit registration process – which varies from platform to platform – is designed to ensure everyone bidding is genuinely interested. The advice here is to submit early.
“Each platform varies in the way it manages the deposit payment process, so ask the agent if in any doubt about what is required,” Mr Ellis said.
It’s foolish to attend an auction with a plan to bid – whether it’s in-person or online – without having finances sorted and a limit set.
“Discuss the property you are looking to buy and what price point you are thinking with your broker ahead of the auction,” Ms May said. Always set a limit and have the paperwork done pre-auction.
“Do not make it up as you go along, as you will invariably spend too much. Auctioneers are trained to get you swept up in the emotion of it all and to ‘help’ you pay more.”
It’s the heart that falls in love with a property, but the head that will win it at auction, whether in person, on the phone or online, Ms May said.
“Take you time to consider the bids that come up. Listen to the auctioneer, but do not let them pressure you. You’ve set your limit: now stick to it. I know when people I bid against are at or already over their limit, as their increments come right down and they take longer to respond.
“This ‘tell’ helps me buy the property from under you. If you have a clear limit, your bids can remain confident and steady, right up to that very last bid,” she said.
Mr Ellis said buyers should know their limit, but be realistic and flexible to a degree.
“After all, you don’t want to be out there shopping again on Monday because you missed out by $500. Just keep your cool and don’t let the process go to your head,” he said.