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  1. #1
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    Default Auction question- setting a limit

    A house we love for its space (renovated and in an older area, 1960/70's) and location (walk distance to huge park, reserve, school and shops) is going up for auction next week.
    The price range is advertised $440-480k
    The agent who sold my house said its worth around $500k and my cousin who is also buying in the area (mainly for land) said set your limit $510k.

    Anyway Dh and I can afford up to $530-$570($600 max) as we recently sold our house and have some left over after paying our loan off.

    How do we not get excited at auction and overpay? Will other bidders stop at the real market value?

    Im confused!

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    Default Auction question- setting a limit

    Get someone to bid on your behalf, seriously. You said your cousin was buying in the area, so ask your cousin to go to the auction, be firm with your limit. And goals, like say your limit for this house is $520, or something, but, don't get into a bidding war and try to get it for as little money as possible.

    If you will be too emotional, stay at the playground nearby and don't even go to the auction.

    Auctions are meant to be emotional, so that people try to outbid each other, and the more someone else seems to want it, the more you're willing to bid to beat them.

    Also, in a house this age, you'll need to save as much as possible to fix any issues that your renos uncover.

    Good luck.

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    Default Auction question- setting a limit

    If that is the price range advertised I would be worried about going any higher than $480k because that would have been set using recently sold similar properties in the area plus some profit for the owners - if you pay more than it is worth then you start out in a bad financial position. The only other thing I would suggest would be getting a bank valuation before auction.
    I agree with PP, send someone on your behalf with a definite set limit.
    Remember that the end of the auction is only the beginning of the spending!

  4. #4
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    Thanks guys!!
    We will prefer to only spend max $530k as there are things we would like to do.

    The night before I might write down figures, so on auction day I have it in front of me to remind myself of this!

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    Default Auction question- setting a limit

    Only advice I have into get a bank appraisal before bidding. I don't think it's a good idea to buy it for more then its worth as that could put you in a very bad place financially.

    Good luck with the auction!

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    I find price ranges set by agents very frustrating. Auction of a house we really wanted yesterday went for $150k over the agents guide! Great for the seller but not for those of us who thought it was in our price range.
    I understand up to 50 over guide from emotional buyers but not 150.

    I agree with others. Set your limit but get someone else to bid. Good luck, its exciting

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    Default Auction question- setting a limit

    Market value is what buyers pay for a home, it's not set by agents, owners or banks - its set by buyers
    Set your limit but if it is the best house for you and there are no others around and it's in a good area I would not lose it for a few thousand dollars ( if you can afford it!)
    I've had many buyers with buyers remorse - also bidding is very stressful - especially when your bidding on behalf of someone else so be careful in asking other people to do it for you

  8. #8
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    I would rather bid myself TBH

    I'm getting a bank valuation this week too.

    Before the financial 'slump' this property would have easily fetched high $500. It's is an area that will pick up once things get better (it's not in a new outer estate that's a bit slower)

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    So I'm getting worried now as house prices starting to rise again. In 2010 they rose around 20%, in 2011 stayed steady, in 2012 droped around 11%.
    Now they're starting to rise again. They are expected to rise around 5% in the next six months however they area I am looking in has already risen in the last two months according to the latest sales.

    So should I bid higher knowing that they will most likely rise in the next few months.

    If market value is around $510,000 (advertised low range of $440-480k) then it could be valued $530-560k by the end of the year. We just don't want to miss out!!

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    Default Auction question- setting a limit

    Go to what you can comfortably afford - make sure there are no other houses around and if this one is your favorite then go for it - the market is definitely moving but hopefully you get in before it starts to go to high and you are forced out of it!
    Have you been to all the open houses? Has there been much other interest? What is the agent saying?


 

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