Many homes are listed for auction these days because the strategy generates excitement and allows the market to set the price for the home.

If you’re a buyer, bidding at auction can feel overwhelming. Here are some tips to help you prepare and bid with confidence.

Top tips to bid at auction

• Attend as a bystander first

Sticking your hand up to bid at auction can be surprisingly daunting. There will be a crowd of people, a fast-talking auctioneer and a lot of nerves.

Before you bid on a home you really want, go to a handful of auctions first to scope them out. Doing this will give you a good idea of how the process works and take away some of the stress of the unknown.

• Know your budget

You have to know what you can afford to spend before you ever bid at auction. You don’t want to place a bid that is beyond your budget because you will be expected to sign a contract and hand over a deposit immediately after the final hammer falls.

Auction fever is a very real, though little-understood phenomenon that drives people to bid higher and higher. If you don’t have a clear budget and know your stopping point, you won’t put yourself in an uncomfortable position.

Speak to a broker and have pre-approval in place so you can quickly arrange the loan in the days after you win at auction.

• Scope out the auction site

Do a little groundwork before the day of the auction or before it gets started.

By going to a few practice auctions, you will have been able to see where the better places to stand are when you bid at auction. If you check out the auction site beforehand, you can figure out where the best place to stand is and get there early to stake your claim. The last thing you want is to be stuck at the back where the auctioneer can’t see you.

• Do your research

Research is hugely important in real estate. In this case, you want to look into the market as well as the auction process.

You need to know the market because you don’t want to bid over the value of the property. You may be within your budget but you still shouldn’t overpay. The money you save in your budget can be put towards home improvement or invested in a different way.

• Use a buyer’s agent

If you’re too nervous or don’t have time to prepare to bid at auction, you can enlist the services of a buyer’s agent to do it for you. They will charge a fee but they can save you from feeling stressed or overwhelmed by bidding with confidence but not exceeding your limit.

Speak to your local Professionals representative for more advice about bidding at auction.