By Nicole Frankiewicz, Trainee Solicitor

Property auctions can be an excellent way for investors to secure opportunities quickly – sometimes even below market value. But auctions also carry risks, and once the hammer falls, there’s no turning back. To help you prepare, here’s a step-by-step guide with key considerations for property investors.

1. Do Your Homework Early

Research the property thoroughly before auction day. Review the Contract of Sale, Vendor’s Statement, and any disclosures. Check recent comparable sales in the area to determine the property’s fair market value.

2. Engage a Conveyancer or Solicitor

Legal packs can hide potential pitfalls, such as restrictive covenants, easements, or unusual conditions. Having your conveyancer review these documents early will give you clarity and peace of mind.

3. Secure Your Finance

Auction purchases are unconditional. Make sure you have loan pre-approval (or funds available) and are confident you can pay the deposit immediately – usually 10% on the day. When deciding finance options, make sure to consider the physical condition of the property and whether it meets lending criteria if looking at traditional mortgages.

4. Understand Auction Rules and Requirements

Auction conditions vary between states and territories. Know the identification you’ll need, how vendor bids work, and the settlement period offered. Being familiar with the rules avoids last-minute surprises.

5. Inspect the Property

For investment purchases, it’s crucial to assess the property’s condition. Organise building and pest inspections so you know the cost of any repairs or upgrades before bidding.

6. Review Rental Potential and Yield

As an investor, go beyond the purchase price. Check current rental demand, potential weekly rent, and likely yield. Factor in property management costs, maintenance, and vacancy risks.

7. Check Zoning and Future Development Potential

Look at council zoning, overlays, and planning restrictions. A property’s long-term value may depend on redevelopment potential or future land use.

8. Plan Your Bidding Strategy

Auctions move quickly and emotions can run high. Decide your maximum bid in advance and stick to it. Whether you bid early to set the pace or wait to enter near the end, discipline is key.

9. Prepare for the Deposit and Settlement

Be ready with your deposit on auction day (often via bank cheque or transfer). Confirm the settlement timeframe in the contract aligns with your finance and investment goals.

10. Have a Backup Plan

Not every auction ends with a purchase. If bidding goes beyond your limit, be ready to walk away. There will always be other opportunities, and sometimes the property may be passed in – giving you the chance to negotiate afterward.

Final Word for Investors: Auctions can be a powerful way to expand your portfolio, but success comes from preparation. With legal, financial, and market research in place, you’ll be bidding with confidence – and protecting your investment from costly mistakes.

Thinking of buying at auction?

Our experienced Real Estate team can help you navigate the legal and financial risks before you bid. Contact our team today on 0161 928 3848 or email mch@mchaleandco.co.uk to ensure you’re auction-ready and set up for a smart investment.