Buying a house at an auction might seem complicated at first. But with some research and planning, you'll be ready to bid on the perfect house in no time.

Research Auction Clearance Rates

It is really important that you do your homework when it comes to preparing to buy at auction. The best advice is to study the auction clearance rate in the local suburban area. This will give you an idea of what the price range properties are selling for and that will give you a rough idea of what you need to spend. When viewing a property, think about who else might be interested in the property. Ask the real estate agent questions such as how many contracts have been issued to prospective buyers or is the vendor accepting pre-auction bids. This can help you determine how much competition there is and price ranges.

Know Your Bidding Strategy

It won't necessarily matter whether you bid first or not, and remember that it's just fine to make a conservative offer. As long as it is within the price range, the real estate agent will most likely come back to you to match a competitive offer. At auction, you'll be put on the spot having to face the auctioneer. You don't want to place a high bid early on only to have someone else outbid you out of your price range. Think about what you'll do if you have lots of people bidding against you, and what you'll do if you're the only bidder.

Bring Your Cheque Book to an Auction

Preparing your finances and bringing your cheque book is a must when attending an auction. If you are the successful bidder, you will have to have 10% of the sold auction price as a deposit on the day of the auction.

Know Your Maximum Buy Price

Ask yourself how much you're willing to bid at auction. Then, write it down on a piece of paper and keep it with you the day of the auction. It's a little thing to do yet it works. Keep it in your pocket. When emotions get high in auction bidding mania, it can be difficult to stick to your buy price limit. Bringing a reminder to help yourself stay rational will help. Have a trusted friend go to the property auction with you to help you stay level-headed throughout the bidding process. It's important to stick with this number, because most auctions don't have a cooling off period - once you've bid, you've bid.

Get a Property Inspection

Homes are often bought pending an inspection. It is crucial that the buyer makes sure that the property is not hiding any secrets about the health of the home. An average building, pest and property inspection would cost between around $800 - $1000 for a certified inspector to visit the property. It may cost you now, but the comfort of mind in knowing there are no hidden secrets of your home will be worth it.