The first step to your successful purchase at an auction is to really do your homework. This means being very well prepared and work out the true market value (NOT the CV) of your home.
Study sales figures and CVs and visit a number of auctions of comparable homes in the same areas (for the Eastern Bays, that would mean Kohimarama, Glendowie, St Heliers, Orakei and Mission Bay) to work out the market value of your intended home.
Typically, I would advise buyers to look in the 2-km radius of that dream home that they want to buy because that’s usually where other competing buyers set their search parameters. For family homes that are in good school zones, it will make sense to look for homes that are within that particular school zone.
Visiting other auctions will also get you familiar with the strategies and structure in an auction. After all, you are unlikely to be buying a house every few weeks. Different agencies have differing ‘modes’ of auctions, with some allowing for vendor bidding or negotiations during the auction itself.
Then work out what that home is really worth to you, after consideration of all your financial and personal circumstances. Finally, come to the auction with 3 prices in mind.
- One you’d like to buy if there’s a discount – aka buying at a discount for a home that ticks off a few (but not all of the boxes)
- One what you think it’s worth – aka a price that you would be happy to pay (but not regret losing the home over) – this is suitable for a home that ticks off most (but not all of the boxes)
- One that you might be prepared to pay for it – aka the ‘stretch’ price that you are willing to go for that perfect home that ticks off all the boxes
The reason for working out all these prices is that you do not want to be considering or discussing such issues in the heat of the auction. Any pause during the auction suggests weaknesses, especially in the eyes of the auctioneer.
Know your bottomline before the auction, and stick to it.