Tips for Buying at Auction – Part 4
Auction Tip No.5
Now my fifth tip is if you’re actually a bit fearful or have some anxiety around the auction process, why not engage the services of a professional buyers agent? Because Buyers Agents are generally in the field all week, looking at properties and have attended and bid at hundreds and hundreds of auctions. So you can actually tap into their experience for a fee to make sure that you get the best outcome you’re looking for. Now, quite often the objection that we get is most buyers agent charge somewhere between 2% – 3% of the purchase price, so at face value, people would think, “I actually don’t want to pay that fee”. But you are going to pay a similar or more fee than that through one or three ways. in my experience from what I’ve seen from people that do it themselves.
The first one is that they would overpay for the property. If its a brand new property, they might overpay because there is a lot of developers commissions and sales commissions in it. Quite often, they are much higher than the fees that you would have to pay for a buyers agent. Or if its an established property, just going through that auction process can be quite daunting.
You turn up on the day and if you get caught up in the process of the auctioneer trying to draw as much money as they can get out of you. Quite often, you can pay more than you should have done.
The other thing is through procrastination. Now, people really put off the decision to buy properties that are going for auctions and this could mean that they wait 6-12 months until they find the property or just get the confidence to finally bid. The unfortunate part of that is that procrastination means that they are paying a greater price in the future than they would have been paying if they have tried to buy it now.
So its either through overpaying, through procrastination or the last one is, buying the wrong asset cause you need to consider your short, medium and long term goals. But also, the capital growth potential of the property as well. A professional and experienced buyers agents can help you buy a property that is suitable for your practical needs if its a home but also your capital growth needs if you really want to look at your nest egg or if you’re buying for an investment property. So I would seriously consider using the services of a professional buyers agent.
Here are other parts of Bryce’s Auction Series: